Self-managed super funds don’t trust the sharemarket

Self-managed super funds don’t trust the sharemarketSelf-managed superannuation fund trustees are reducing their exposure to stocks because of sharemarket volatility.

A survey by research company Investment Trends and fund manager Vanguard found that do-it-yourself funds are now less inclined to put their money into blue chip and high yielding shares.

Instead, they are more likely to go for the safer option of professionally managed funds, and of course, cash.

The survey found that 55 per cent of SMSF trustees said they planned to invest in blue chips over the next 12 months, down from 65 per cent who had that intention a year ago.

Those who expected to invest in high-yield shares and exchange traded funds (ETFs) came in at 24 per cent and 18 per cent respectively. That’s a significant drop on the 32 per cent and 20 per cent who were saying that last year.

The survey found that 17 per cent were planning to invest in managed funds, compared to 14 per cent last year.

The proportion of direct shares in portfolios is now sitting at 38 per cent, the lowest level in six years. And the average portfolio is now 25 per cent cash holdings, the most it’s been since 2013.

Their biggest concerns were the slowdown in China and another global financial crisis.

“It is becoming harder for trustees to select investments because of the volatility. They feel they can’t do it as well because of the uncertainty. They feel less confident about doing it themselves,” Recep III Peker, head of research for wealth management at Investment Trends told the Australian Financial Review.


An award winning author and journalist, commentator, lecturer, and speaker, Leon is a freelance business journalist who covers a range of areas including politics, strategy, globalization, leadership and all the big trends ahead. His main skill is summing up all the news that’s around. For the last 30 years, his main focus has been on management issues. He also produces two podcasts for RMIT University, Talking Business and Talking Technology. Leon has worked for Fairfax, News Limited, AAP and the Herald and Weekly Times.

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