Motley Fool Australia

Do you own the 10 favourite stocks of SMSF investors?

The local SMSF sector is huge! Like nearly $600 billion worth of huge, and these investors are often older, wiser and more conservative. A typical conservative investor would hold a significant portion of assets in cash and fixed interest, however that doesn’t appear to be the case for Australia’s SMSFs based on a survey conducted by AMP Limited (ASX: AMP).

The survey found that the average SMSF (the sample was taken from 2,200 DIY funds with an average fund size of $1 million) had 30% of assets in cash and fixed interest, 40% in Australian listed shares, 12% in international shares, and 18% in property. This asset allocation provides an opportunity for long-term Australian and international investors.

Exposure to Income and Growth Stocks

If we assume that the asset allocation is typical for the whole sector, then approximately $240 billion of SMSF funds are held in Australian listed shares. For reference, the Commonwealth Bank of Australia (ASX: CBA) has a market capitalisation of $130 billion and BHP Billiton Limited (ASX: BHP) has a market cap of $110 billion.

SMSFs tend to accumulate companies that pay out big dividends and have shown a consistent ability to grow that dividend payout over many years. The AMP analysis dug deeper into the statistics to highlight the top-10 holdings of SMSFs. The analysis found nine companies that are fairly unsurprising choices and one that stood out as a bit of an outlier. The 10 companies are:

  1. Commonwealth Bank of Australia
  2. Westpac Banking Corp (ASX: WBC)
  3. Australia and New Zealand Banking Group (ASX: ANZ)
  4. BHP Billiton Limited
  5. Telstra Corporation Ltd (ASX: TLS)
  6. Fortescue Metals Group Limited (ASX: FMG)
  7. National Australia Bank Ltd. (ASX: NAB)
  8. Woolworths Limited (ASX: WOW)
  9. Wesfarmers Ltd (ASX: WES)
  10. Woodside Petroleum Limited (ASX: WPL)

Invest like a Pro

I think readers will agree with me that nine of the companies listed above are unsurprising choices for income-driven investors. The one that caught my eye however, was Fortescue Metals. As the sixth-largest holding, and with a market cap of just $9 billion (albeit down from $18 billion not long ago), one must assume that SMSFs own a significant slice of the company.

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Motley Fool contributor Andrew Mudie owns shares in Foretescue. You can find Andrew on Twitter @andrewmudie

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