This article lists the 20 most popular Australian shares invested in by SMSFs as of 30 June 2024. We are grateful to Class, an SMSF administration software company, for providing the data used in this article.
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Despite persistently high inflation, high interest rates and nail-biting volatility, Australian shares (read investors) held their nerve in the year to June 2024, with the benchmark S&P/ASX 200 index up 7.8% (12.1% including dividends).
That was sure to keep SMSF investors happy, as domestic shares remain their preferred asset class with Class SMSFs holding 28.3% of their assets in Australian listed securities.
The next largest asset class among Class SMSFs is direct property (21.0%) followed by cash and term deposits (15.2%).
The most popular stocks among SMSFs are household names Australians have grown up with – think the big four banks (representing 40% of the top 20 by market value), mining heavyweights BHP and Woodside, Telstra and the big retailers Wesfarmers, Coles and Woolworths. They offer investors an opportunity to buy shares directly in companies they believe will deliver long-term returns.
Buying shares directly also allows individual investors to build their own diversified portfolio across a range of industries according to their own needs for long-term growth, create a sustainable income stream from dividends and reap the tax advantages of dividend franking credits.
The average dividend yield of Australian shares was around 4% in June 2024, or close to 5% when franking is included. Many of the shares in the top 20 yield significantly more (although it should be remembered that yields fall as share prices rise, and vice versa). For all these reasons, direct holdings in Australian shares are the most popular investments among SMSFs (excluding cash and term deposits), with 61% of Class funds holding them. This compares with 9.4% of funds holding direct international shares and around 33% with ETFs and traditional managed funds, many of which have underlying investments in local and international shares.
Of course, picking shares and monitoring them takes time and effort but it does have the potential to grow wealth in the long run. And because all earnings on investments in your super fund must be preserved until you retire or reach another condition of release, capital gains and dividend income must be reinvested within your fund where they compound over time.
According to Class data, as of 30 June 2024 direct investment by SMSFs in domestic listed securities is heavily concentrated in blue chip stocks that tend to mirror the ASX top 20 listed companies.
The top 20 list below is ranked by popularity (the percentage of SMSFs that hold these shares), rather than the percentage value of assets that all SMSFs have invested in those shares, although both figures are provided in the table.
