SMSFs continue to thrive

The latest data from regulators APRA and the ATO show SMSFs are continuing to thrive:

There are almost 612,000 SMSFs, as of September last year. That’s a 3.5% increase on the previous year and a 9% rise over the past five years.

And the number of SMSF members has reached 1.12 million.

The total assets held by SMSFs has increased to $885 billion. That’s up 5.6% over the year to September 2023, and 31% over the prior five years

The average SMSF has nearly $1.5 million in assets. Almost 45% of SMSFs have funds from $200,000 to $1 million. And 47% have funds between $1 million and $5 million.
The proportion of funds under $1 million has steadily declined from 65% in 2018 to 58%.

SMSFs favour listed shares, cash, unlisted trusts and non-residential property. Stocks are 28% of funds, cash and term deposits are 17%, while unlisted trusts 13%.

Unfortunately, the ATO only has a breakdown of SMSF asset allocation by fund size up to the 2022 financial year. Yet this data is fascinating as it shows that the greater the fund size, the less money is allocated to cash. For example, SMSFs with less than $50,000 in funds had 45% invested in cash and term deposits, compared to just 12.5% for those with $50 million or more.

Wealthy SMSFs have more money in listed shares, non-residential property, and unlisted trusts. No doubt, the latter two are due to them having more access to these asset classes.

The median age of SMSF members of newly established funds was 46. Meanwhile, the median age of all SMSF members was 62.

65% of SMSFs have existed for more than 10 years.

SMSFs’ share of total superannuation assets dropped from 26% to 25% in the year to June 2023, according to the latest annual superannuation bulletin from APRA. But it’s held firm around 25% for the past five years.

The APRA report says total super assets increased to $3.6 trillion in the year to June 30, 2023. To put it into perspective, that figure compares to the total value of the ASX of $3 trillion, though it still trails the largest asset pool in Australia, namely residential property, valued at $10.3 trillion.

Profit for member funds, which include industry funds, public sector funds, and corporate funds, have been the largest gainers over the past year and decade. In 2013, these funds were 40% of total super assets; now they are 54%.

Retail funds have been the big losers. They now comprise just 21% of total super assets, down from 30% a decade ago.