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Forward Thinking Magazine : August 2011
46 According to statistics from portfolio administrators Multiport, which surveyed 1,400 SMSFs, the percentage of assets that SMSFs allocated to cash shot up from 12.6 per cent back in December 2007 before the collapse of Lehman Brothers and the start of the GFC to above the 20 per cent mark. Indeed the figure hit a heady 28.8 per cent in December 2008, months after the start of the crash. While it has come off since, it was still sitting comfortably at 21.8 per cent in March 2011, a level it has held for a number of quarters. Looking at asset allocation figures from the Australian Taxation Office, cash accounted for 26.4 per cent at March 2011. Commenting on cash's rise to fame, Multiport's technical services director Philip La Greca says: "Cash was once viewed as a holding place, but now it is an asset in its own right." This view is echoed by Andrew Hamilton, managing director of SMSF specialist Cavendish Superannuation. "Cash is now seen as a true investment asset that is earning a good return," says Hamilton. This has resulted in some funds holding on to cash as an investible asset rather than just having cash on hand to wait for an opportunity to invest, or automatically reinvesting dividends straight back into the market. Steven Wright, director of fixed interest at RBS Morgans, says this scenario is even more likely to occur if the SMSF is in the pension phase than if it is in the accumulation phase, when dividends are more likely to be reinvested. Philip La Greca, Multiport Steven Wright, RBS Morgans