Analysis from SuperConcepts – which is the largest administrator of self-managed super funds in Australia – shows DIY investors decreased their exposure to the top 10 ASX stocks from 11.9 per cent to 11.6 per cent between the June and December quarters.
The allocation to the top 10 ASX stocks has seen a significant drop from 31 March 2015 when the top 10 stocks accounted for 20 per cent of SMSF assets.
SuperConcepts national manager of technical solutions Phil LaGreca said that during the last few quarters, trustees have gradually reduced their exposure to the top 10 listed securities.
“Australia’s top 10 equities have experienced declining value in 2018 because half of the list is comprised of banks, and their bad fortunes have dragged down the entire index,” said Mr LaGreca.
The top 20 stocks, he said, underperformed at 0.05 per cent for Q3 in 2018 compared to the rest of the All Ordinaries index at 0.57 per cent.
“This has led SMSF trustees to look for opportunities in mid-caps experiencing the middle of their growth curve because they’ll generally show greater growth in profits, market share and productivity,” he said.
Future growth opportunities
Savvy investors are eyeing new growth markets at home and abroad, as traditional safe havens produce modest results.
For example, the organic food sector is providing an interesting opportunity for investors in Asian markets, as consumers become more discerning in their purchasing.
Further, some investors are eyeing future opportunities for investing in cannabis, as its legalisation in developed nations continues to grow, particularly for medicinal purposes.
Climate change is also having an impact on where investment opportunities are, and non-major banks like AMP Capital are encouraging investors to consider the headwinds it can create in certain industries.
“Some investors don’t believe in climate change and believe that any consideration of it in an investment process means sacrificing return,” Kirsten Le Mesurier of AMP Capital said.
“It should be considered as part of investment decisions,” she said.
“Not considering these impacts would mean ignoring the potential impact on share prices and investment returns,” she said.