Which companies do super funds invest in most often?

Peter Terlato 4 November 2016

superannuation money australia investment calculator

The big four banks and Telstra make the top five.

If you set up a self-managed superannuation fund (SMSF), which investments are going to attract you? New data suggests the answer is often blue-ribbon shares.

Data from SuperConcepts shows that its SMSF customers have diversified their investment strategies, increasing their stakes in Australian equities, hybrid securities, cash and short-term deposits.

SuperConcepts September quarterly analysis of its SMSF client investments shows the greatest increase in investment since the June quarter was in Australian shares, up from 34.5% to 35.3%.

With the All Ordinaries index outperforming the ASX top 20, many trustees improved their positions by steering investment away from the leading stocks.

While not all are Australian-listed equities - two are pooled structures for accessing international equities - the 10 largest holdings among SMSF investors represent almost 14.7% of total assets held.

Top 10 largest holdings

1. Commonwealth Bank Ltd
2. Westpac Banking Corporation
3. Telstra Corporation Limited
4. ANZ Limited
5. National Australia Bank Ltd
6. BHP Billiton Limited
7. Magellan Global Fund
8. Platinum International Fund
9. Wesfarmers Limited
10. CSL Ltd

The survey also showed an increase in hybrid allocation (up from 6.5% to 7% quarter-on-quarter) within the fixed interest sector. Hybrid securities combine elements of debt securities and equity securities and usually pay a rate of return up until a specified date.

The report suggests the growth stems from the introduction of ANZ's latest tier one capital hybrid, Capital Notes 4, released in August, together with the RBA's cash rate cut that same month.

The level of cash held by SuperConcepts SMSFs increased modestly from 18% in June to 18.1% in September.

Investment in term deposits greater than one year rose from 1.3% in June to 1.5% in September, while allocations to managed funds decreased 02.% quarter-on-quarter to 4.2%.

Exposure to international equities decreased from 13.1% in June to 12.7% in September, as did asset allocation to the property sector, down 1.1% quarter-on-quarter to 20.6%.

Around one quarter (19.4%) of SMSFs are utilising a borrowing arrangement, according to the report. Property loans rose 7.4% during the quarter, while investment loans fell 16.9%.

In terms of satisfaction, industry super funds have been outperforming retail funds for more than 15 years.

SMSFs offer control over how and where you invest your money, but they have their risks too.

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Picture: Shutterstock

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