What $1.1 trillion in SMSF assets reveals about investor behaviour

The superannuation system is an increasingly large pool of wealth, sitting at around $4.77 trillion as of 30 June 2026. The vast majority sits with the large super funds, but a growing cohort of Australians is looking to take greater control of their retirement investments through self-managed super funds.

There are now over 680,000 SMSFs with assets just north of $1.1 trillion. But how are these funds being invested?

The latest Benchmark Report from SMSF administration platform Class provides insight, analysing anonymised, aggregated data from almost 200,000 SMSFs on its platform.

In what should not be much of a surprise for anyone familiar with Australian investors’ home bias, Direct Australian listed securities remained the largest asset class, accounting for 26.4% of assets.

Outside of cash and term deposits - which almost every SMSF holds but at a much lower percentage of their funds - listed Australian securities are comfortably the most popular asset class, held by 56.5% of all SMSFs.

In the interview above, I spoke with Class CEO Tim Steele about what is dominating SMSF portfolios, how a shake-up in borrowing rules could reshape the property market, and the different ways that investors are gaining international equities exposure.

Home bias and big names

“I don't think it's unreasonable to assume that people have an inherent bias to companies and names that they know, and I hope are making informed decisions about which companies they're investing in for the right reasons,” Steele says.

“It may also come down to cost and accessibility and perhaps not wanting to carry potentially any hedges on foreign currency or otherwise.

“I also think dividends matter. If you're relying on income in your superannuation, you want dividends to continue to support the cashflow needs that you might have and establish a pension payment.”

Supporting Steele’s view on the bias towards big names is the top 10 direct Australian share holdings, which are skewed towards the banks, large miners and household names. 

International equities and the growth of ETFs

While Australian shares dominate, international equities have been ticking up in popularity, but only marginally. Direct international listed securities are held by 10.8% of SMSFs and make up 2.7% of assets, putting them behind all but the still-niche crypto and collectibles asset classes in popularity.

Given the ASX 200 returned just 2.7% over FY26 - good for 16th out of the 20 major stock markets with a total market capitalisation of at least US$1 trillion - investors could be leaving some money on the table.

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“Diversification is critical to long-term returns, and that includes international exposure,” Steele notes.

“If you look at returns over the last couple of years, it's fair to say that those markets have done, certainly the US, done better than the Australian market. Therefore you might have left something on the table, but people have got to make a choice based on their own risk tolerance, their own investment strategy, which they have to have as part of having a compliant SMSF, as to whether that fits into their overall investment profile.”

The growth of ETFs

The direct holdings above show that, much like domestic equities, SMSF investors with international stocks have skewed towards the large names that they know and understand. Gaining international exposure outside of listed securities, however, is where ETFs and managed funds come into play.

“I don't think it's a phenomenon that's particularly unique to SMSFs. I think it's part of the broader appeal of ETFs and managed funds that they can get access to a broad range of investments. It's relatively affordable and that trend I think will continue,” Steele adds.

“It is possible that they're getting exposure to international through various ETF options available to them. That may be a really easy, less expensive way to do that.”

In line with this, international equity ETFs feature prominently among the most widely held investments, making up six of the top 10. 

Property holds steady ahead of LRBA shake-up

Direct property remains another major plank of SMSF portfolios, and the report shows only a modest dip over the past couple of years, to 21.1% of assets. However, that will likely change now that SMSFs can no longer borrow within the fund to purchase residential property.

"Our view is that it's perhaps less likely to have a material impact on the attractiveness of SMSFs or establishment rates than we might have first thought when the restriction was announced," Steele says.

That doesn't mean the change is inconsequential, however. Extrapolating from Class' data, he estimates there were around 11,500 residential LRBAs in Australian SMSFs in FY25, a notably higher figure than the government's own estimate of about 8,700 in FY24. 

If Steele's figure is closer to the mark, the flow-on effects could be more significant than expected, particularly given that any property held in an SMSF must be rented at arm's length.

"Property is a really critical issue, and the affordability of housing in Australia is something that matters, and the government's taken steps to try to address that. 

"I do think there is a potentially broader impact on the property market and accessibility to rental properties that maybe is just one of the natural things we have to deal with as part of trying to make housing more affordable in this country, but it is perhaps a slightly perverse, maybe unintended consequence."

Where SMSF investment is heading

Looking ahead, Steele doesn't expect any dramatic swings in SMSF behaviour, but rather a continuation of the trends already in motion: a further, gradual shift out of cash into active investments, a possible tilt in property allocations toward commercial assets given the residential LRBA changes, and continued growth in international equities and ETFs as accessibility and costs improve.

"People want to put their money to work, they want to get a return."