Deposits still popular with investors

19/07/2010

Cash savings products became very popular during the global financial crisis years of 2008 and 2009. SMSF investors led the market in adopting online savings accounts and term deposits with 29 per cent of self managed super assets moving to cash in those years.

Cash is maintaining its popularity among some investors beyond the end of the GFC. A UBank survey of customers in March revealed that a third of SMSFs have more than 50 per cent of their funds in cash.

Colonial First State’s (CFS’s) head of investment market research, Stephen Halmarick, said investors are still holding $1.36 trillion in cash assets – or approximately 12 per cent of total assets – at the end of March 2010. “Some of the returns available on cash rates are pretty attractive since the Reserve Bank of Australia has been raising interest rates, so I think that is sort of a key thing for markets,” he says.

Source: Money Management