Irene Guiamatsia

Investing in property might be a factor driving actor interest in starting an SMSF, but Investment Trends research shows overall the sector is well diversified.

The ‘2024 Vanguard/Investment Trends Self Managed Super Fund Report’ found 30 per cent of those surveyed want to set up an SMSF to invest property.

Investment Trends head of research Irene Guiamatsia says property is a big attractor to creating an SMSF, but not something that’s easy to do.

“If you have to borrow money to make your investment then you face a whole bunch of hurdles,” Guiamatsia says.

“That explains, we believe, the transition between the large appetite that exists among potential SMSFs. When you look at what actual SMSFs are doing around property it’s not as singularly concentrated in property as what you would have thought, based on the intention.”

But despite SMSF trustees citing property investment as a key driver in starting an SMSF, the research found all SMSFs, including new ones, are in fact well diversified.

Newly established ETFs are over-allocated to ETFs (13 per cent versus 8 per cent among all SMSFs) and cash (22 per cent versus 18 per cent).

The largest holdings for newly established ETFs are cash and cash products (22 per cent), property (14 per cent), and direct shares and ETFs (tied at 13 per cent).

All SMSFs are largely weighted to direct shares (27 per cent), cash (18 per cent), and property and managed funds (9 per cent each).

Guiamatsia says products like ETFs and managed funds have done a strong job diversifying SMSFs portfolios.