POWERED BY MOMENTUM MEDIA
SMSFs overweight in Australian shares and cash
According to Vanguard, strong weightings towards shares and cash in self-managed super funds (SMSFs) may expose a need for greater asset diversification.
SMSFs managed over $880.5 billion in Australian and international assets at the end of 2022, a $20 billion increase compared to the previous quarter.
Data released earlier this month by the Australian Tax Office (ATO) revealed that Australia-listed shares and cash, in aggregate terms, were the top asset classes that SMSFs were investing in.
The two assets collectively represented over 44% of total SMSF assets, with listed shares valuing over $256 billion followed by cash and term deposits at $136.5 billion, as of 31 December 2022.
Unlisted trusts were the third most popular asset for SMSFs, with $113 billion of investing flowing towards this class.
Non-residential real property received over $87 billion from investors, which reflected SMSF trustees’ ability to own and occupy property through their SMSF.
Vanguard observed that the large holding in Australian shares highlighted a notable “home bias” by SMSF investors leaning towards equities.
The overweight allocation towards these assets indicated a possible reluctance towards higher-risk investments options, suggesting that “SMSFs may not be as diversified as perhaps they should be”.
Factors causing the higher allocation towards certain classes included tax benefits for investors, the ability to own commercial properties and keeping cash on hand for retirement withdrawals.
With the number of SMSFs exceeding 600,000 for the first time in the last quarter of 2022, more than 1.13 million people were managing their own retirement savings.
AUTHOR
Jasmine Siljic
Jasmine Siljic is a cadet journalist at Money Management and Super Review. Prior to joining MM and SR, she also worked across other Momentum Media brands as an intern. Jasmine previously completed an internship at Mamamia news. She is currently studying a Bachelor of Media and Communications at Macquarie University.
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
