Super funds turn to term deposits for better returns
Article by Mozo
Superannuation funds and businesses are increasing their term deposit holdings as they look to secure strong returns from their growing assets, it has been observed.
Research by the Sydney Morning Herald shows that Australia’s wealth per capita rose to $46,000 in the March quarter of this year, a strong increase on the $36,200 recorded just 12 months earlier.
The newspaper noted that superannuation funds and businesses have remained cautious in the midst of the economic recovery, with more inclined to compare term deposits in search of the most stable rates of return.
Savanth Sebastian, an economist with Commonwealth Securities, commented: "Super funds are spoilt for choice, given the attractive yields being offered on term deposits."
Indeed, it was revealed that super funds held 14 per cent of their assets in forms such as cash and bank deposits at the end of March – almost double the usual eight per cent.
Meanwhile, John Collett, a finance columnist for the Age, noted this week that Aussies can currently find returns of more than seven per cent on three-year term deposits.
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