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.

RELATED ARTICLES

Which shares and funds do SMSFs invest in?

What is happening with SMSFs? Part 2

Navigating SMSF property compliance

banner

Most viewed in recent weeks

Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

The 2025 Australian Federal election – implications for investors

With an election due by 17 May, we are effectively in campaign mode with the Government announcing numerous spending promises since January and the Coalition often matching them. Here's what the election means for investors.

Finding the best income-yielding assets

With fixed term deposit rates declining and bank hybrids being phased out, what are the best options for investors seeking income? This goes through the choices, and the opportunities and risks involved.

What history reveals about market corrections and crashes

The S&P 500's recent correction raises concerns about a bear market. History shows corrections are driven by high rates, unemployment, or global shocks, and that there's reason for optimism for nervous investors today. 

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 605 with weekend update

Trump's tariffs and China's retaliatory strike have sent the Nasdaq into a bear market with the S&P 500 not far behind. What are the implications for the economy and markets, and what should investors do now? 

  • 3 April 2025

Latest Updates

Investment strategies

4 ways to take advantage of the market turmoil

Every crisis throws up opportunities. Here are ideas to capitalise on this one, including ‘overbalancing’ your portfolio in stocks, buying heavily discounted LICs, and cherry picking bombed out sectors like oil and gas.

Shares

Why the ASX needs dual-class shares

The ASX is exploring the introduction of dual class share structures for listed companies. Opposition is building to the plan but the ASX should ignore the naysayers and bring Australia into line with its global peers.

The state of women's wealth in Australia

New research shows the average Australian woman has $428,000 in net wealth, 40% less than the average man. This takes a deep dive into what the gender wealth gap looks like across different life stages.

Investing

The two most dangerous words in investing

Market extremes are where the biggest investment risks and opportunities lie. While events like this are usually only obvious in hindsight, learning to watch out for these two words can alert you to them in real time.

Shares

Investing in the backbone of the digital age

Semiconductors are used to make microchips and are essential to a vast range of technology and devices. This looks at what’s driving demand for chips, how the industry is evolving, and favoured stocks to play the theme.

Gold

Why gold’s record highs in 2025 differ from prior peaks

Gold prices hit new recent highs, driven by a stronger euro, tariff concerns, and steady ETF buying – all while the precious metal’s fundamental backdrop remains solid amid a shifting global economic landscape.

Now might be the best time to switch out of bank hybrids

In this interview, Schroders' Helen Mason discusses investing in corporate and financial credit securities, market impacts of tariffs, opportunities for cash investments, and views on tier two and hybrid bonds.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
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. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. 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.