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So last year: Self-managed funds dump 2020 buzz stocks, switch to materials

Business

Self-managed superannuation funds poured hundreds of millions of dollars into the market last year but dumped once-popular stocks like Afterpay, Qantas and Flight Centre and pivoted into the materials sector.

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According to Nabtrade, 2020 marked a year when SMSF trustees flicked a switch and became aggressive buyers. But they have also stayed away from the “reopening trade” which refers to stocks that would benefit from the reopening of borders.

Nabtrade’s Gemma Dale said 2020 provided the buying opportunity trustees were waiting for and they switched from being sellers to buyers and “poured hundreds of millions of dollars into the sharemarket”.

“Despite this they still managed to grow cash balances, bringing in cash from other sources. Many SMSFs are clearly keeping their powder dry expecting a pullback after the market’s astonishing strength post-COVID-19,” Dale said.

“The real shift is at the sector level. Financials have always comprised the bulk of the average SMSF portfolio as retirees enjoyed the strong yields provided by the big four banks. SMSF allocations to financials dropped 4 per cent over a single year. Almost all of this decline has been picked up in materials which have climbed from less than 13 per cent of the average portfolio to 17 per cent.”

BHP has risen from the sixth most popular stock to third. Fortescue has jumped from 16th to 10th.

Dale said some of the most popular stocks from the 2020 buying spree were no longer in the top 20 stocks for SMSFs.

That included Afterpay, Zip, Qantas and Flight Centre.

Not surprisingly, NAB retains the number one spot followed by CBA, BHP, Westpac and ANZ.

Woolworths has fallen two spots to 12th.

CSL has fallen from fourth to sixth.

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