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Report confirms SMSF investment trends

SMSFs were attaining their international exposure mainly through exchange-traded funds (ETF) and managed funds, the latest analysis from Class has revealed.

The “June 2016 SMSF Benchmark Report” found that to 30 June 2016, the SMSF asset allocation consisted of 31.3 per cent in listed shares, 23 per cent in cash and term deposits and 17.6 per cent in unlisted trusts.

Non-residential real property made up 8.5 per cent of the allocation, residential real property 6.3 per cent, listed trusts 4.7 per cent and limited recourse borrowing arrangements 2.5 per cent.

When it came to the top 20 ETF investments held by SMSFs, 58 per cent were international while 42 per cent were domestic.

The top 20 ETFs made up 78 per cent of total SMSF ETF investment.

The report also found that in relation to the top 20 managed funds, 57 per cent were international equities, 12 per cent were cash, 8 per cent were Australian fixed interest, 7 per cent were international fixed interest and 7 per cent were Australian equities.

“In the past, there’s been lots of discussion about whether SMSFs have sufficient exposure to various markets and whether that’s fixed income or international markets,” Class chief executive Kevin Bungard told selfmangedsuper.

“So what we wanted to do here was look at ETFs and managed funds – the gut feeling was that’s probably where SMSFs were getting their exposure for international markets and potentially other markets like fixed income.

“It was good to look at that and see that there’s a good percentage of ETFs and managed funds in international exposure and helping SMSFs have that more rounded asset allocation.

“It’s good to validate what people were assuming was the case through the data in order to confirm it.”

The analysis on domestic shares revealed banks made up 48 per cent of the top 20 domestic shares.

The top 20 domestic shares made up 50.2 per cent of total SMSF domestic shares investment.

The report also said tech companies made up the greater proportion of the top 20 international shares at 54 per cent compared to 46 per cent in other industries.

The top 20 international shares made up 17.7 per cent of total SMSF international share investment.

The report is the second quarterly study analysing the over 110,000 SMSFs administered on Class Super, representing 19.2 per cent of the estimated 577,236 SMSFs in Australia.

It is compiled using a selection of de-identified data extracted from across the Class Super user base.

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