SMSFs in pension phase carry a stereotype of having a more conservative investment profile, while also chasing yield as a source of income.
The December 2017 Class SMSF Benchmark Report takes a closer look at SMSF pension assets and highlights where retirees are putting their money.
SMSFs in pension phase carry a stereotype of having a more conservative investment profile, while also chasing yield as a source of income.
The December 2017 Class SMSF Benchmark Report takes a closer look at SMSF pension assets and highlights where retirees are putting their money.
The Report reveals that on average, pension SMSFs earn a 7% higher gross dividend yield on their ASX shares when compared to their accumulation peers (6.18% vs 5.77%) and the ASX 200 index which provides a yield closer to 5.6% – a clear indication that pension SMSFs are, as assumed, attracted to higher yield stocks.
Pension SMSFs have a strong preference for domestic equities over international shares. Investment in domestic equities sits at 33% of gross assets for pension SMSFs vs. 23% for accumulation SMSFs. Investment in international equities sits at 1.0% for pension SMSFs and 1.2% for accumulation SMSFs. This preference for domestic shares is likely to be influenced by the fact that franking credits are heavily used by Australian companies and are not generally available for international shares.
Meanwhile, pension SMSFs are less interested in direct property, with the average accumulation SMSF allocating nearly 3 times as much to residential property. Accumulation SMSFs are also far more likely to invest in residential property and they are 12 times more likely than pension SMSFs to borrow money to do so.
You can download and read the full Class SMSF Benchmark Report here
Lilian Keaty | CLASS
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