SMSF Asset Allocation Trends

There isn’t a huge amount of data flowing around on the SMSF sector when it comes to performance and investment trends, but Multiport have recently put out a very interesting report which reveals the asset allocation trends within the SMSF sector.

The following chart shows the overall asset allocation of SMSFs at the end of September 2011:

SMSF Asset Allocation

Compared to your average balanced super fund, this chart shows that the average SMSF has a much higher allocation to cash, and the difference between the Australian equities allocation (36%) and the international equities allocation (8%) is also much wider than the average balanced super fund.

The reason for this probably comes down to the simple rule of accessibility.  Cash is the most accessible investment of all, and Australian equities are vastly more accessible to the average Australian SMSF in comparison to international equities – especially if we are talking direct equities which are often a benefit of the SMSF structure.

The following chart shows just how many SMSFs invest in direct equities as opposed to indirect equities (via managed funds etc):

SMSF Direct Equities ComparisonThere were a number of other interesting trends and facts for the September 2011 quarter that came up in the Multiport report:

  • Cash and fixed interest holding both increased by around 2% each
  • Australian equities exposure reduced by around 3%
  • Total cash holding are just under 25%
  • Many investors kept dividends in cash rather than reinvesting
  • Direct property increased to 14% total allocation, which is the highest since 2008
  • Around 16% of funds had some borrowings

The report also provided an insight into the specific shares invested in by SMSFs.  The top 10 shares were as follows:

  1. BHP Billiton
  2. Commonwealth Bank
  3. Westpac
  4. ANZ
  5. National Australia Bank
  6. Wesfarmers
  7. Woolworths
  8. Woodside
  9. Telstra
  10. Rio Tinto

Overall the Multiport report gives some great information on the SMSF sector, especially when it comes to SMSF asset allocation.

The results of the survey are based on the asset allocation of around $1.3 billion in SMSF holdings.

So how does your SMSF compare against these figures?  Are you happy with your SMSF asset allocation?

Asset allocation is one thing, but what we really want to see are performance figures for other SMSFs, that will really give us all something to compare and to think about.

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