At 30 June 2014, most SMSF asset holdings continue to be in Australian listed shares and cash and term deposits (see appendix 1, table 15). Graph 13 shows 60% of all SMSF assets were directly invested in these two asset classes.
Graph 13: 2014 SMSF asset allocation
Certain asset types have been amalgamated – see table 15 for the complete list of assets.
Graph 14 shows annual shifts of SMSF asset holdings by asset type as a proportion of total assets. For the second consecutive year, there was a decrease of 2% in cash and term deposits and a 2% increase in listed shares, reversing part of the movements from 2011 to 2012 in these assets.
From 2013, changes were made to ATO data collection for assets held under limited recourse borrowing arrangements (LRBA) and this contributed to an increase of LRBA investments to $15.1 billion or 2.7% of total SMSF assets in 2014, up from $755 million or 0.2% of total SMSF assets in 2010.
Graph 14: Change in percentage of total SMSF assets, by asset type
Graph 15 shows the annual shifts in the proportion of SMSFs holding the same types of assets as in graph 14.
A comparison of graphs 14 and 15 shows that, in 2014, assets in cash and term deposits as a proportion of total SMSF assets decreased, while the proportion of SMSFs holding these assets remained stable.
For listed shares, there was a 2% increase in the proportion of total SMSF assets held, while the proportion of SMSFs holding the assets increased only marginally.
There were no significant shifts in the proportion of funds holding each of the major asset types. The only increases were for SMSF holding assets in listed trusts, returning to 2011 levels and ‘all other assets’, which was attributable to debt securities and assets under LRBAs.
In 2014, 5.7% of SMSFs reported assets held under LRBAs, an increase of almost 3% from the prior year. The majority of these funds held LRBA investments in Australian residential real property and overseas shares, representing 2.4% and 1.6% of total SMSFs. In terms of value, 85% or $12.9 billion of LRBA investments were attributed to real property assets combined (see appendix 1, table 15).
Graph 15: Change in percentage of SMSF population holding assets, by asset type
At 30 June 2014, 83% of SMSF assets were reported as directly invested by SMSFs, with 17% invested in managed investments. In comparison, 20% of SMSF assets were invested in managed investments in 2010, indicating a shift away from investing in these types of assets over the five years to 2014 (see appendix 1, table 15).
In 2014, the distribution of asset types held by SMSFs within each asset range was relatively consistent.27 However, as fund asset size increased, the proportion of assets in cash and term deposits decreased significantly. Funds across most asset ranges tended to favour cash and term deposits, while those with more than $1 million in assets held a higher proportion in listed shares.
Larger funds tend to have a greater proportion of their assets in unlisted trusts and non-residential real property than smaller funds. However, the proportion of assets in residential real property held by SMSFs across asset ranges is fairly consistent.
For the year ended 30 June 2014, 47% of SMSFs were in the pension phase and held 70% of reported assets.28 The assets held by SMSFs in the pension phase have increased by 9% over the five years to 2014.
In 2014, SMSFs in the pension phase had very similar assets to SMSFs in the accumulation phase (see appendix 1, table 16). The only noticeable difference was SMSFs in the pension phase tended to favour held listed shares, while accumulation phase funds held a greater proportion in non-residential, residential real properties and LRBAs.
27 ATO 2015, Self-managed super fund statistical report, June 2015.28 Based on 2014 SAR lodgments.