Self-managed super fund trustees have dumped their investments in Australia’s top 10 listed equities as performance has failed to meet expectations.
The proportion of funds that held Telstra in their portfolios dropped from 50 per cent in the December quarter in 2017 to 45.5 per cent in the December quarter last year, according to Class’s latest SMSF Benchmark Report.
The most widely held bank stock, Westpac, was in 46.6 per cent of SMSF portfolios in the December quarter – down from 47.3 per cent in the December quarter 2017. The proportion of SMSFs holding BHP Billiton stock fell from 46.1 per cent to 45 per cent.
SMSF administrator SuperConcepts has come up with similar findings. According to its data, the top 10 listed securities currently represent 11.6 per cent of total investments, down from 11.9 per cent in the June quarter.
The move is reflective of the underperformance of Australian equities which impacted SMSFs.
“Australia’s top 10 equities experienced declining value in 2018 because half of the list is comprised of banks, and their bad fortunes have dragged down the entire index,” said Phil LaGreca, SuperConcepts’ national manager of technical solutions.
According to Class’ Benchmark Report, SMSF allocation to listed Australian shares dropped from 29 per cent to 26.2 per cent of asset between the December quarter in 2017 and in December 2018.
Despite this drop, listed shares are still the biggest holdings in SMSF portfolios. Cash and term deposits follow closely behind, at 20.8 per cent, a 0.2 per cent decrease over the year.
Allocation to non-residential property rose from 9 per cent to 10.2 per cent, while allocation to residential property fell from 7 per cent to 6.3 per cent.
SMSFs are using managed funds to diversify their investments to international equities. SMSFs with managed funds have a higher investment in international equities compared to SMSFs which don’t hold managed funds.
Magellan Global, Platinum International and Platinum Asia have maintained their position at the top three managed funds that SMSFs use for global equity exposure