Self-managed super fund trustees tend to have a very stable approach to Australian equity investment. They like the big stocks, especially the ones that pay high dividends, and they like to hold them long term.
Online broker SelfWealth has launched an exchange traded fund, the SelfWealth SMSF Leaders ETF, that tracks holdings of the top performing SMSFs through the SelfWealth SMSF Leaders Index.
Claiming a world first, SelfWealth analyses the share portfolios of 80,000 SMSFs, using data supplied by SMSF administration service BGL Corporate Solutions. Each quarter it selects the top 10 per cent of performers and picks out the stocks they are most heavily invested in.
Stocks outside the S&P/ASX 200 are excluded. The portfolio has 61 stocks (the maximum will be 75), which are equally weighted. The portfolio is rebalanced quarterly.
The fund was launched on November 8. With only three weeks of performance on the board the fund has returned 2.3 per cent, compared with a return of 2.5 per cent for the ASX 200 index.
The ETF has had seed funding of $100 million from ETFS Capital.
Independent Investment Research has given the ETF a ‘recommended’ rating. It says: “A disproportionate number of the portfolios, being based on SMSFs, are for investors approaching or in retirement. It is not unreasonable to assume that the index will exhibit a bias to more established growth and income-oriented stocks.”
IIR says the back-testing of the fund indicated superior capital growth without compromising yield. It cautions that the management fee of 88 basis points is high for an index ETF.