SMSF average assets
In 2015, the average assets of SMSFs reached $1.1 million, representing a growth of 20% over five years.
The median SMSF asset size was $631,000, an increase of 25% over the period. The rates of growth in average and median SMSF assets are consistent with that of SMSF member balances (see Graph 9 and Appendix 1, table 12).
The difference between the average and median asset figures reflects the number of SMSFs with more than $1 million in assets. These have increased from 28% in 2011 to 33% in 2015 (see Appendix 1, table 14).
For SMSFs established in 2015, the average fund assets were $392,000, an increase of 15% from average assets of $340,000 for those established in 2011. Likewise, the median assets of SMSFs established in 2015 were $235,000, an increase of 18% over the period (see Graph 10 Appendix 1, table 13).
SMSF assets by age of fund
For funds established in the 10 years to 30 June 2015, the median asset value in the year of establishment was on average $218,000. The median asset values of these funds increased by 51% in their second year of operation.
For more recently established funds, the time taken to double their starting asset balance has increased to approximately four years, compared to the three years for funds established in 2006 and earlier years.
SMSF assets by payment phase
Over the five years to 30 June 2015, there were shifts in the distribution of SMSFs by payment phase across asset ranges.
There was a decrease in the proportion of funds in accumulation phase with assets of $200,000 or less (by 6%) and a corresponding increase of funds with assets over $200,000. Most of this shift was to funds with assets of over $200,000 to $1 million (by 5%).
There was also a decrease in the proportion of SMSFs in pension phase with assets of more than $50,000 to $1 million (by 6%), and an increase in funds with assets of more than $1 million to $5 million (by 4%).
On average, 50% of SMSFs in accumulation phase held assets of between $200,001 and $1 million, and 54% of SMSFs in pension phase held assets between $500,001 and $2 million.
In 2015, while 31% of SMSFs in accumulation phase held assets of $200,000 or less, only 6% of SMSFs in pension phase were within these asset ranges. Conversely, 24% of SMSFs in pension phase held assets of greater than $2 million, compared to only 5% of SMSFs in accumulation phase.
There was a similar proportion of SMSFs with assets of between $200,001 and $2 million in each payment phase, of 64% and 70% respectively.
SMSF asset by range
At 30 June 2015, 48% of SMSFs had assets of between $200,001 and $1 million, accounting for 23% of all SMSF assets (see Appendix 1, table 14). Generally, over the five years to 30 June 2015, the proportion of SMSFs distributed across asset ranges followed a similar pattern to that of SMSF members by asset balances.
Over the period, the majority of SMSF assets were held by funds with assets between $1 million and $5 million, representing 54% of total SMSF assets. The proportion of SMSFs in these asset ranges gradually increased from 26% in 2011 to 30% in 2015. In 2015, only 2.8% of funds held assets of more than $5 million, representing a 1% increase of funds over the period.
The growth of total SMSF assets continues to show a shift of SMSFs towards the higher asset ranges. Graph 12 shows that for the five-year period, the proportion of SMSFs holding more than $500,000 in assets increased.
Graph 12: SMSF asset sizes 2011–2015
Graph 13 shows SMSFs established in the five years to 2015 have moved to establish with higher opening asset balances. Of the SMSFs established in 2011, 50% held more than $200,000 in assets, increasing to 56% for those established in 2015.
There was a decrease of 7% in the proportion of SMSFs established with less than $100,000 in assets, while the proportion of funds established with assets of more than $200,000 to $1 million increased by 5%.
Graph 13: SMSF asset size in establishment year 2011–2015
SMSF asset allocation
At 30 June 2015, most SMSF asset holdings continue to be in Australian listed shares and cash and term deposits (see Appendix 1, table 15). Graph 14 shows 57% of all SMSF assets were directly invested in these two asset classes.
Graph 14: 2015 SMSF asset allocations
Certain asset types have been amalgamated – see table 15 for the complete list of assets.
Graph 15 shows annual shifts of SMSF asset holdings by asset type as a proportion of total assets.
For the third consecutive year, there was a decrease of 2% in cash and term deposits and a 1% decrease in non-residential real property. While the proportion of listed shares and limited recourse borrowing arrangement assets increased (by 1%).
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 $20 billion or 3.4% of total SMSF assets in 2015, up from $1.4 billion or 0.3% of total SMSF assets in 2011 and $8.8 billion or 1.8% of total SMSF assets in 2013.
Graph 15: Change in percentage of total SMSF assets by asset type
Graph 16 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 2015, 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 1.6% increase in the proportion of SMSFs holding the assets, while the proportion of total SMSF assets held increased only marginally.
The proportion of funds holding managed investment assets such as listed trusts, unlisted trusts and other managed investments increased slightly, by 1.5%, 0.4%, and 0.4% respectively.
There was a decrease of 0.5% in the proportion of funds holding non-residential real property and a 2.2% increase in the proportion of funds holding all other assets,
In 2015, 6% of SMSFs reported assets held under LRBAs, which is consistent with the prior year (5.7%). The majority of these funds held LRBA investments in Australian residential real property and non-residential property, representing 3.4% and 1.5% of total SMSFs. In terms of value, 91% or $18.5 billion of all LRBA investments were attributed to real property assets combined (see Appendix 1, table 15).
Graph 16: Change in percentage of SMSF population holding assets by asset type 2011–2015
At 30 June 2015, 81% of SMSF assets were reported as directly invested by SMSFs, with 19% invested in managed investments. This is consistent with the amount invested in managed investments each year for the five years up to 2015 (see Appendix 1, table 15).
In 2015, SMSFs across asset ranges up to $1 million tended to favour cash and term deposits, holding a minimum of 29% of total assets in this type of investment. While those with more than $1 million in assets held a higher proportion in listed shares. Generally as fund size increased, the proportion of assets held in cash and term deposits decreased significantly while the proportion of assets held in trusts and other managed investments increased. This is consistent with 2014.
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 2015, 48% of SMSFs were in the pension phase and held 70% of reported assets. The assets held by SMSFs in the pension phase have increased by 6% over the five years to 2015.
In 2015, 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 slightly favour listed shares and managed investments, while accumulation phase funds held a greater proportion in non-residential, residential real properties and LRBAs.
SMSF borrowings and other liabilities
At 30 June 2015, SMSFs had liabilities to non-members of $22 billion, equivalent to 3.6% of total SMSF assets. This consists of $16.9 billion in borrowings and $5.1 billion in other liabilities, 2.8% and 0.8% of total assets respectively (see Appendix 1, table 15).
SMSFs are prohibited from borrowing money, except in certain limited circumstances permitted under the SIS Act. These circumstances include LRBAs that meet certain conditions. Other liabilities are obligations the SMSF has to non-members that do not fall under borrowings.
Over the five years to 2015, SMSFs with borrowings increased progressively from 3.1% of SMSFs in 2011 to 8.4% in 2015. The average amount borrowed also increased each year, from $346,000 in 2011 to $378,000 in 2015.
On average, 85% of SMSFs with borrowings were in accumulation phase, while 15% were in pension phase. Over the period there was an increase of 4% in the proportion of funds in accumulation phase reporting borrowings, and a corresponding decrease of funds in the pension phase with borrowings.
In 2015, SMSFs with borrowings invested a larger proportion of their assets in non-residential and residential real property and in assets held under LRBAs, with smaller proportions in cash and term deposits and listed shares.
Compared to all SMSFs, those with borrowings were more likely to hold non-residential and residential real property, and assets held under LRBAs. Conversely, they were less likely to hold listed shares and cash and term deposits.
The majority of SMSFs had other liabilities, an average of 62% over the period. The average amount for other liabilities increased from $13,100 in 2011 to $15,500 in 2014.
SMSF asset concentration
For the year ended 30 June 2015, 11% of SMSFs held all their investments in one asset class, representing 5% of all SMSF assets. This is down from the five-year average of 13% and 6% respectively see Appendix 1 table 17).
Generally, SMSFs with smaller asset holdings were more likely to have high asset concentration, with diversification of assets increasing as fund assets rise.
SMSFs with assets between $1 and $50,000 (43%) were more likely to hold only one class of asset, consistent with the fact that SMSFs in this range held 55% of their assets in cash and term deposits (see Appendix 1, table 18).
SMSFs with the larger assets have a greater diversity of investments, with less than 8% of funds within each asset range of more than $500,000 holding just one asset class (see Appendix 1, table 18).
In turn, over the five years to 2015, SMSFs with assets of $200,000 or less held a higher concentration of assets.
In 2015, approximately 53% of SMSFs held 50% or more of their assets in cash and term deposits or listed shares (see Appendix 1, table 19). Cash and term deposits were the sole asset held by 10% of SMSFs. While 6% of SMSFs invested 90% or more in listed shares, only 0.2% solely held listed shares.
SMSFs in the accumulation phase were more likely to hold one class of asset than those in the pension phase (see Appendix 1, table 20). This suggests SMSFs in the pension phase tend to hold a more diversified investment portfolio in supporting an income stream.
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