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Do SMSFs rely too heavily on bank shares for dividend income?

Do SMSFs rely too heavily on bank shares for dividend income?

Now that the Reserve Bank of Australia (RBA) has begun to cut the official cash rate, debate about the impact on bank profits has intensified.

So, what does this mean for self-managed super fund (SMSF) investors who rely heavily on bank shares for their dividend income as well as capital growth?

To paraphrase Mark Twain, reports of the death of the banking sector have been greatly exaggerated. After a dividend ‘bloodbath’ during the COVID crisis, when major banks cut or suspended dividends, bank shares rebounded and dividends were restored.

About the author

Barbara Drury

Barbara is a financial journalist and author with over 30 years’ experience in Australia and the UK. She is a contributor to The Sydney Morning Herald and The Age Money section, and has worked for the Australian Financial Review and The Australian.

Barbara is the author of Alan Kohler’s Eureka Report Guide to Personal Investing, Sorting Out Your Finances for Dummies and Personal Finance for Dummies and co-author of Investing for Dummies with James Kirby.

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