Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 216

2. Drilling down into latest SMSF allocations

There is a long-running debate about SMSF exposure to global equities, driven by the misleading interpretation of the data issued by the Australian Taxation Office. The ATO only lists direct holdings on global exchanges in its international equities allocation, and this number misses the billions held by SMSFs in managed funds, Exchange Traded Funds and Listed Investment Companies. Drilling into the actual fund data, SMSF allocation to international equities is about 7%, which is one-third of the 23% allocated by large institutional funds, but much higher than the 1% suggested by the ATO data.

Drilling deeper into the listed trust allocation

Compensating for the ATO data weakness is the Class Limited SMSF Benchmark Report. We have early access to the June 2017 numbers compiled from over 130,000 SMSFs using de-identified fund-level data. Initially, for consistency with the ATO data, Class uses the same asset allocation categories, as shown below.

Class also provides the asset value ranges of SMSFs, showing some very small and very large balances but two-thirds in the $200,000 to $2 million bands.

Where the first chart above reports listed shares at 29%, like the ATO data, the vast majority of these shares are listed on the ASX. It is the unlisted trusts category at 17.7% of assets and the listed trusts at 4.5% of assets where the global equities lie. In these SMSFs, managed funds comprise 11.5% of assets, with 32% of SMSFs holding some type of managed fund.

The asset exposure of the Top 20 managed funds is 58% international equities, 10% Australian fixed interest, 9% cash, 8% global fixed interest and 5% listed property. Only 8% is Australian equities. A 58% allocation of the 11.5% in managed funds places 6.7% in global assets.

As shown below, the Top 20 managed funds are prominent in many SMSFs, with about a quarter of SMSFs with managed funds holding investments with either Magellan or Platinum.

Direct equities by security

The Class data reports the largest asset allocation is to listed domestic equities (including listed trusts) at 37% of SMSF assets, with a place in 68% of all SMSFs.

The domestic listed assets comprise:

  • Shares 78.5%
  • Debt and hybrids 9.0%
  • Stapled securities 6%
  • ETFs 5.9%
  • Other listed trusts 0.6%

The following table shows the Top 20 shares in SMSF portfolios. Over half of all SMSFs that hold domestic shares have experienced the Telstra pain of a halving in the share price and cut in dividend. The banks make up over half the investments in the Top 20, with Westpac overtaking BHP in the last quarter.

Graham Hand is Managing Editor of Cuffelinks. Exclusive access to the Class SMSF Benchmark Report for June 2017 was provided by Class Super.


What is happening with SMSFs? Part 2

The impact of our marriage breakdown on our SMSF

SMSFs and COVID: the biggest trends in 5 charts


Most viewed in recent weeks

10 reasons wealthy homeowners shouldn't receive welfare

The RBA Governor says rising house prices are due to "the design of our taxation and social security systems". The OECD says "the prolonged boom in house prices has inflated the wealth of many pensioners without impacting their pension eligibility." What's your view?

House prices surge but falls are common and coming

We tend to forget that house prices often fall. Direct lending controls are more effective than rate rises because macroprudential limits affect the volume of money for housing leaving business rates untouched.

Survey responses on pension eligibility for wealthy homeowners

The survey drew a fantastic 2,000 responses with over 1,000 comments and polar opposite views on what is good policy. Do most people believe the home should be in the age pension asset test, and what do they say?

100 Aussies: five charts on who earns, pays and owns

Any policy decision needs to recognise who is affected by a change. It pays to check the data on who pays taxes, who owns assets and who earns the income to ensure an equitable and efficient outcome.

Three good comments from the pension asset test article

With articles on the pensions assets test read about 40,000 times, 3,500 survey responses and thousands of comments, there was a lot of great reader participation. A few comments added extra insights.

Coles no longer happy with the status quo

It used to be Down, Down for prices but the new status quo is Down Down for emissions. Until now, the realm of ESG has been mainly fund managers as 'responsible investors', but companies are now pushing credentials.

Latest Updates


The 'Contrast Principle' used by super fund test failures

Rather than compare results against APRA's benchmark, large super funds which failed the YFYS performance test are using another measure such as a CPI+ target, with more favourable results to show their members.


RBA switched rate priority on house prices versus jobs

RBA Governor, Philip Lowe, says that surging house prices are not as important as full employment, but a previous Governor, Glenn Stevens, had other priorities, putting the "elevated level of house prices" first.

Investment strategies

Disruptive innovation and the Tesla valuation debate

Two prominent fund managers with strongly opposing views and techniques. Cathie Wood thinks Tesla is going to US$3,000, Rob Arnott says it's already a bubble at US$750. They debate valuing growth and disruption.


4 key materials for batteries and 9 companies that will benefit

Four key materials are required for battery production as we head towards 30X the number of electric cars. It opens exciting opportunities for Australian companies as the country aims to become a regional hub.


Why valuation multiples fail in an exponential world

Estimating the value of a company based on a multiple of earnings is a common investment analysis technique, but it is often useless. Multiples do a poor job of valuing the best growth businesses, like Microsoft.


Five value chains driving the ‘transition winners’

The ability to adapt to change makes a company more likely to sustain today’s profitability. There are five value chains plus a focus on cashflow and asset growth that the 'transition winners' are adopting.


Halving super drawdowns helps wealthy retirees most

At the start of COVID, the Government allowed early access to super, but in a strange twist, others were permitted to leave money in tax-advantaged super for another year. It helped the wealthy and should not be repeated.



© 2021 Morningstar, Inc. All rights reserved.

The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.