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Do shares dominate your superannuation assets?

Do shares dominate your superannuation assets?

Superannuation assets rose in the past 12 months, with equities remaining the focus, raising questions about the need for portfolio diversification.


The number of self managed super funds (SMSFs) in Australia grew by more than 5% in the past 12 months.

Data from the Australian Prudential Regulation Authority (APRA) for the 12 months to June 30, 2016, showed total SMSF assets were 3% higher at $621.7bn, up from $603.4bn a year ago, with 577,236 SMSFs being regulated by the Australian Taxation Office compared with 547,301 in June 2015.

Total super assets in Australia reached $2.1tn, up 3.6% on the previous year.

In the June 2016 quarter, total assets of entities with more than four members increased by 3.3%, or $46.2bn, to $1.4tn.

Of that $1.4tn, by the end of June, 48.4% was invested in equities, with 22.4% in Australian listed equities, 21.5% in international listed equities and 4.5% in unlisted equities.

Fixed income and cash investments were at 33.6% of investments with 20.8% in fixed income and 12.8% in cash, APRA said.

Bonds and fixed interest securities may be less volatile than shares and can be used to create a balanced portfolio.

Property and infrastructure accounted for 13.9% of investments from that $1.4tn total, while 4.1% was invested in other assets, including hedge funds and commodities, the data showed.

Volatility and global economic uncertainty was high throughout the past 12 months, leaving annual industry-wide rate of return (ROR) for entities with more than four members at 2.8% for the year, compared with 8.9% the previous year and the annualised five-year ROR of 7.4%.

Your investment strategy will be specific to you and your situation and the amount that each asset class should make up in your portfolio depends on your risk tolerance.

It’s never too early or late to think about topping up your super. Putting in a little extra now can make a difference in the future.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance.