Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Why SMSFs are making changes to asset allocation splits

With interest rates expected to stay low over the next few years and bonds delivering negative returns after inflation, traditional asset allocation for retirees may no longer work as well as it has in the past.

Recent research indicates SMSFs have continued to make substantial changes to their asset allocation throughout COVID-19, with SMSF investors tending to adopt a more aggressive stance than they did in early 2020. The trend is looking set to continue with 49% of SMSFs having expressed an intention to reduce their allocation to cash and 42% looking to increase their growth exposure within the next 12 months.

Picking next year’s winning stocks with any certainty is impossible. The good news is that with ETFs, you don’t necessarily need to. Equity ETFs can be a one-stop-shop, delivering instant diversification for an investor looking to increase their growth allocation, and alleviating the need to pick individual investments.

And given the proliferation of new products, including more targeted exposures with high growth potential, in addition to traditional broad market exposures to Australian and global equities, as well as fixed income, we are seeing SMSFs allocating larger portions of their portfolios to ETFs.

Download the full paper here

 

  •   26 August 2021
  •      
  •   

 

Leave a Comment:

banner

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.