Suspected conservatism of pension SMSFs proven true

Cloud-based Self Managed Superannuation Fund administrator, Class has confirmed the suspicion that SMSFs in the pension stage lean toward conservative investment portfolios, finding that they have a strong emphasis on high yield shares.

The Class December 2017 Class SMSF Benchmark Report, which analysed more than 150,000 SMSFs, found that, on average, SMSFs in the pension phases earn a seven per cent higher gross dividend yield on their ASX shares as compared to those still in accumulation.

Kevin Bungard, Class chief executive said that this data validated the commonly cited belief that pension SMSFs are conservative and heavily yield-focused in their investments.

Related News:

SMSFs in the pension phase also showed conservatism and an emphasis on income in other investment choices.

Pension SMSFs also had approximately 10 per cent more of their investment portfolio in domestic equities than their accumulation counterparts, with 0.2 per cent less in international equities. Class said that this could be due to Australian companies’ heavy use of franking credits.

There was also less investment in direct property by pension SMSFs. The average accumulation SMSF invested nearly three times as much in residential property and were 12 times more likely to borrow money to invest in such property.

Related Content

ATO grants extension to SMSFs on annual returns

The Australian Taxation Office (ATO) has acknowledged the key role of self-managed superannuation fund (SMSF) advisers in bedding down the Governmentâ...more

ATO reports SMSFs and APRA-funds deliver same returns

Self-managed superannuation funds (SMSFs) have delivered returns in-line with those of Australian Prudential Regulatory (APRA)-regulated funds, accord...more

SMSF equity investments surge

Australian self-managed superannuation fund (SMSFs) investors showed surging interest in equity investing in 2017, according the new data from nabtrad...more



Add new comment