Self-managed superannuation fund (SMSF) administrator Multiport’s quarterly analysis into retirement savings investments has shown property is still the preferred asset being purchased through limited recourse borrowing arrangements in SMSF portfolios.
The latest Multiport SMSF Investment Patterns Survey for June 2011 showed 52 per cent of the funds under its administration that had limited recourse borrowing arrangements in place used them to acquire property, with the other 48 per cent using gearing arrangements to buy shares and other assets.
While the majority of SMSFs are using loan proceeds to fund property purchases, the proportion gearing to buy other financial assets increased during the quarter by 4 per cent.
Multiport said this shift had most likely been driven by SMSF trustees wanting to take advantage of under-valued equities before they rose in price again, coupled with the greater ease associated with arranging borrowings to purchase financial products.
The analysis also found loans for the purchase of property to be around $200,000, while borrowing arrangements for other financial assets to be roughly half that in size.
Outside of gearing, portfolio asset allocation for the 2011 June quarter moved defensively toward cash, short-term deposits and fixed interest.
Overall cash holdings rose by 1 per cent and fixed interest allocations increased by 1.3 per cent.
In contrast, the portfolio allotment to Australian equities fell over the same period by 2 per cent.
The property and global equity components of SMSF portfolios in the June quarter remained stable.
The average SMSF contribution inflow for the period was $20,000, while the average full-year contribution was $40,700, slightly lower than the previous year when the average total contribution was $45,800.
The study analysed 1600 SMSFs with a total asset base of $1.3 billion.
