The net assets of SMSFs grew to a record $594.6bn over the December quarter, rising 2.7% from the previous quarter. The funds represent 30% of the total superannuation pool.
There were also a record number of SMSFs. The number of SMSFs in Australia as of 31 December was 566,735, up from 560,998 as of the end of September.
But in spite of the record figures, the chief executive of a fintech company has claimed SMSFs are allocating too much to cash. SMSFs' holdings of cash and term deposits hit a new high of $155.4bn in the December quarter, up from $154.5bn in the previous quarter. Cash investments now represent 26% of all SMSF
assets, and OnMarket BookBuilds CEO Ben Bucknell said this strong cash bias could harm wealth creation in the long term.
“To put total SMSF assets into perspective, an average of $40 billion of new equity is issued by Australian companies every year via IPOs and capital raisings conducted by listed companies. That means that just 7% of SMSF balances could fund Australian companies’ entire annual new equity capital requirements. Or put another way: today’s SMSFs could fund the equity capital requirements of ASX listed companies for the next 14.8 years,” Bucknell said.
Bucknell said SMSFs also had a bias toward Australian share holdings, which jumped 6.3% to $178.4bn for the December quarter.
“Like investors everywhere, Australian investors have a home bias. But added to this is a strong bias towards bank and mining shares. A greater exposure to a more varied group of companies, including those listing on the ASX and high-growth small-cap companies, would help to build wealth more effectively over time," Bucknell said.
SMSFs have hit a record over the December quarter, according to new data.