The 2025 Vanguard/Investment Trends Self Managed Super Fund Report revealed that new SMSFs started with higher average balances in 2024 ($430,000, up from $410,000 in 2023), with total SMSF inflows increasing to $7 billion, up from $5.2 billion in 2023.
According to the report, although there has been a sharp decline in market outlook, most SMSFs are staying the course, but some have undertaken deeper portfolio recalibrations, shifting toward exchange traded funds (ETFs) and stocks.
ETF allocations have surged to a record high of 12 per cent, up from 9 per cent in 2024, with 315,000 SMSFs now holding at least one ETF in their portfolio.
The research found that 230,000 SMSFs intend to reinvest in ETFs in the next 12 months, and a further 65,000 plan to make their first ETF investment in the next year.
The uptake of ETFs has been particularly strong among newly established SMSFs (61 per cent use), comprising 31 per cent of those portfolios. By contrast, retirees have a relatively high allocation to direct shares (41 per cent of their SMSFs on average).
Renae Smith, chief of personal investor, Vanguard Australia, said the report showed a growing number of Australian investors, including SMSF trustees, are adopting ETFs, while a high percentage of financial advisers are using ETFs as a core offering to their clients.
The research found that the proportion of SMSFs making substantial asset allocation changes (more than 10 per cent of the fund) was steady year on year (34 per cent in 2024 versus 33 per cent in 2023).
Across the SMSF sector, 39 per cent of advised SMSFs made substantial asset allocation changes versus 32 per cent for non-advised SMSFs, and fewer SMSF retirees are prioritising “building a sustainable income stream”, shifting instead toward capital preservation amid growing market uncertainty, signalling a willingness to recalibrate their retirement strategies.
The report also found that listed investments make up 55 per cent of the average SMSF portfolio, with non-advised trustees allocating even more (58 per cent), while most SMSF portfolios remain heavily exposed to direct shares (37 per cent on average), with their average investment in direct shares at $450,000.
Cash remains an important liquidity anchor and represents approximately 15 per cent of SMSF portfolios, but cash holdings fell to a 10-year low. Advised SMSFs tend to allocate slightly more to cash than their non-advised counterparts.
Furthermore, many SMSF trustees also have substantial investment holdings outside of their super fund. The report revealed that 60 per cent hold direct shares, 51 per cent have cash holdings, 39 per cent own direct property, and 30 per cent have ETF holdings as non-SMSF investments.
