Directly held listed shares, and in particular Australian listed securities, are dominating SMSF portfolio allocations, according to the latest analysis of client data from administration software specialist firm Class.
The Class “June 2019 SMSF Benchmark Report” revealed listed shares accounted for 27.5 per cent of the SMSF portfolios examined at the end of the last financial year. Cash and term deposits ranked second as an allocation, representing 19.5 per cent of investment portfolios, while unlisted trusts made up 19 per cent of the SMSF investment mix.
With regard to the listed shares allocation, 64 per cent of SMSFs included in the report held direct Australian listed securities.
Further, the analysis found the top 20 shares listed on the Australian Securities Exchange were highly favoured by SMSF investors, with these equities making up 46.7 per cent of total SMSF domestic listed securities investments.
Commonwealth Bank of Australia shares were most popular, contributing 6.8 per cent of total SMSF domestic listed securities investments, followed by Westpac and BHP, both accounting for 5.2 per cent of Australian share holdings.
The report also confirmed managed funds were the most common avenue SMSF trustees are using to access global equity markets, with the top 20 managed funds contributing to 22.5 per cent of SMSF investments in managed funds. Here, the Magellan Global Fund was most popular, accounting for 4.1 per cent of the total, while the Platinum International Fund made up 3.2 per cent of the total.
In addition, the study found SMSFs to be using exchange-traded funds for exposure to developed market equities and as a passive investment strategy in the Australian share market.
While investing in international shares directly was not a very popular approach among SMSFs, those that did implement this practice favoured technology stocks, with this sector making up 57 per cent of the top 20 investments in overseas equities.
The metrics for the report were drawn from the organisation’s data base, which includes 1534 customer businesses.