Over the 2016 financial year, a survey by SMSF administration company SuperConcepts found investments in Australian and international shares dropped 2.6 per cent and 1 per cent respectively.
Speaking at an event in Sydney, AMP Capital’s head of SMSF and self-directed wealth Tim Keegan said investors see the current economic landscape as a “lower for longer” environment.
“Trustees are telling us that they’re looking for alternate investment classes that they couldn’t invest in themselves and as such we are seeing growth in property, and especially commercial property,” Mr Keegan said.
“Commercial property is still paying around 7 per cent yield, and with term deposits at 2 per cent or less as of yesterday, it’s unsurprising that investors are finding real assets an attractive alternative.”
According to SuperConcepts executive manager technical & strategic solutions Phil La Greca, the move is a reflection of increasingly cautious investors.
“There’s been an increasing number of investors moving into property and cash, suggesting they are looking to reduce their exposure to the stock market, which experienced periods of higher volatility during the period,” Mr La Greca said.
Despite declining cash rates, investors have not been deterred from cash holdings, which have risen from 17 to 18 per cent of portfolios over the financial year.
“We’ve seen trustees increase the amount of cash they have invested in short-term term deposits, climbing from 4.7 per to 5.5 per cent over the year,” Mr La Greca said.
The ongoing uncertainty surrounding changes to super was blamed for particularly low levels of contributions, with the 2016 June quarter average experiencing a 38 per cent reduction on last year.
“It was the lowest June quarter we’ve ever seen in terms of contributions,” Mr La Greca said.