The SMSF Sector

The SMSF sector has grown over the past five years at a rate of 27 per cent according to the latest figures from the ATO. Over the last year the value of superannuation assets held in SMSFs grew by $66 billion taking the total pool of assets held in SMSFs to just under $559 billion. And the trend is not slowing down. Year on year there has been growth in the net number of new funds established and in 2013 net establishments reached 33,546. On top of this in total $15.9 billion was rolled into the Self Managed system from other funds in 2012.

The growth in SMSFs over the last five years reflects the confidence the community has in the adaptability of the SMSFs and how well they allow trustees to move with the changing economy. These are some statistics from an ATO report in 2012 which shows just how quick the sector is growing and how SMSFs are going from strength to strength.

• Between 30 June 2009 & 30 June 2013 total registered SMSFs grew from just under 400,000 to over 509,000. This represents total growth of 27%.
• During this time the sector grew by $175 billion or 53%.
• In dollar terms this was the strongest growing sector of Australian superannuation.
• The graph below shows super asset growth by fund type. Total assets increased by 42 % or 474 billion and of this slice SMSF increased by 37%.

Total SMSF Assets

How much money do you need to have in an SMSF? This is a question often asked but harder to answer. The reason for this is every person has different circumstances and their needs are varied in why they use a SMSF structure. The graph below shows the range of asset values held in SMSFs and while the largest segment is $200,000 to $1 million there are also a large number of funds sitting either side.

The ability to use limited recourse borrowing arrangements also means that a fund needs less initial investment to potentially make long term returns.

SMSF Asset Allocation

Given that there are large and varied pool of assets an SMSF can invest in it is interesting to note that the two most significant holdings are in listed shares and cash & term deposits which as of 30 June 2012 make up 61% of all assets held in SMSFs.

After these two holdings the breakup of other assets held is closely divided between property, listed trusts and other managed investments. This further reflects the varied nature of SMSFs and the investment preferences of each individual trustee.