According to the Australian Taxation Office (ATO), SMSFs have allocated nearly $177billion—approximately 20% of their total assets—into pooled investment products such as managed funds, life insurance policies, and collective trusts.
“The SMSF sector represents a significant opportunity for fund managers, with $177billion already invested in managed funds. This allocation is more than one-third of the entire retail managed funds sector, indicating the potential for further engagement from SMSF trustees,” said Aman Ramrakha, executive director of research at Rainmaker Information.
While SMSFs have experienced slower growth since the 2017 introduction of the Transfer Balance Cap, the sector remains a formidable force in Australia’s superannuation system.
Over the past seven years, SMSF assets have grown by just over 5% annually, compared to the 9.5% annual growth in not-for-profit (NFP) superannuation and 3.5% in retail superannuation.
“SMSFs' shifting asset allocation presents ongoing opportunities,” said Ramrakha.
“Managed funds are an increasingly attractive option for SMSF trustees, with allocations continuing to rise steadily.”
“This creates significant potential for fund managers to tap into a large and stable capital source.”
The makeup of SMSF portfolios has evolved notably over the past decade.
Cash holdings have decreased from 33% of total assets in 2013 to around 15% in 2024,while equities (38%) and property (15%) have remained stable.
Additionally, fixed interest allocations have doubled to 8%, reflecting the sector’s appetite for more diversified investment options.
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Total risk market inflows were down a marginal 0.6% over the year to June 2024, decreasing from $18.3 billion to $18.2 billion.
Dual access ETPs, which are transacted both on stock exchanges and off-market through funds managers, can cost four times as much as the rest of the Australian ETP market.
