The latest CommSec SMSF Trading Trends Report indicated that in the six months to 31 December 2017, SMSFs have been increasingly devoting a larger share of their capital to shares outside of the top 20 stocks on the ASX.
“As a result, the value of trades placed by SMSFs in ASX20 companies fell from 40 per cent to 34 per cent over the six months. The value of trades in ASX200 shares also declined from 75 per cent to 69 per cent, largely due to reduced trading in the larger stocks of the ASX20,” the report said.
“The decline was particularly felt in the banking sector with trade value down 15 per cent, which has faced significant headwinds from negative media coverage, as well as the threat of reduced revenue and dividends from a slowing housing market.”
The telecommunication services sector, of which Telstra (TLS) is the major component, also suffered from concerns over the sustainability of dividends, with trade values falling 25 per cent, the report said.
“Meanwhile, SMSF deal sizes for stocks outside the ASX 200 have increased by 13 per cent compared to the previous six months,” the report noted.
Commonwealth Bank head of SMSF customers Marcus Evans said lower returns from traditional SMSF-favoured stocks with household names such as Telstra, have led to SMSFs investing more capital outside the ASX20 suggesting they are willing to take on more risk to get higher returns.
“There are signs that SMSFs have made the move outside of the ASX20 with some conviction. This is illustrated by the fact that while the average SMSF trade size has decreased over the period, the trade size of those stocks outside the ASX200 has in fact increased.”
Mr Evans said the widely publicised gains from mid-cap and junior stocks and the ongoing strength of many international markets – especially in the United States, Europe and emerging markets – has led SMSF investors to conclude that there may be better opportunities elsewhere.
“We will continue to watch the investment habits of SMSFs closely. To date they have been setting the trends when it comes to retail investment,” he said.