Self-managed super fund (SMSF) trustees continued to decrease their allocations to cash during the March 2013 quarter, while exposure to managed funds increased for the first time in two years, according to the latest Multiport SMSF Investment Patterns Survey.
The quarterly survey covers around 1950 funds, a sample of the SMSFs Multiport administers, and the investments held at March 31, 2013. The assets of the funds surveyed represent approximately $1.8 billion.
AMP SMSF administration head of technical services, Philip LaGreca, said the overall allocation to cash fell 1 per cent during the March quarter to 23.4 per cent, its lowest point since the same quarter last year when cash holdings were at 22.9 per cent.
“Lower interest rates during the quarter and the possibility of further cuts have meant cash has become a less attractive investment, so trustees are ‘cashing out’ of cash and looking for other homes for their money,” he said.
Managed funds find favour
The total fixed interest asset allocation remained unchanged at 6.6 per cent compared to the December quarter. However, there was a reduction in exposure to longer term deposits – dropping 0.6 per cent to 1.4 per cent in the March quarter.
“The fall in longer term deposits is most likely the result of unattractive interest rates for new longer term deposits,” LaGreca said.
Meanwhile, exposure to managed funds increased for the first time in two years, rising from 15.8 per cent in the December quarter to 17.4 per cent in the March quarter.
“The lift in the use of managed funds has occurred in the fixed interest and Australian equities sectors, possibly related to the search for an alternative to cash and term deposits, combined with a little more optimism in equity markets,” LaGreca continued.
“Managed funds seem to be the preferred method of investing in overseas markets but there was also an increase in Australian equities, possibly due to softening in the mining sector leaving investors unsure of which stock to invest in.”
Filling the void
AMP also released its first quarter cash flows and assets under management last week, including a strong performance by its retail business.
AMP Financial Planning managing director, Michael Guggenheimer (right), told Professional Planner the integration of the North wrap platform was complete and that this had “filled a void” for AMP planners.
According to AMP figures for the first quarter of 2013, the North wrap platform continued its strong growth, tripling net cash flows to $779 million, compared to $228 million in the same quarter last year.
The company put the gains down to recent platform enhancements and a strong take-up across AMP’s aligned planner network. Assets under management increased by $1 billion to $5.7 billion, up from $4.7 billion in the fourth quarter of 2012.
