FinaMetrica co-founder Paul Resnik pointed to Australian Taxation Office data that show SMSFs had invested $177.6 billion in listed Australian shares as at the end of the June 2014 quarter.
Listed Australian shares accounted for nearly one third, or 32 per cent, of all SMSF assets in the June quarter.
Mr Resnik said SMSF investors ought to think carefully about their overexposure to Australian assets; their underexposure to professional investment management; and their overall exposure to ‘risky’ growth assets.
“By being so heavily exposed to Australian asset classes, SMSFs leave themselves vulnerable to our local market collapse when that happens – and it will,” he said.
“Many SMSFs don’t understand, can't easily access or accept the importance of international diversification and so they don’t invest meaningfully offshore,” Mr Resnik said.
He added that many SMSF investors “don’t understand [exchange-traded funds] and hold managed funds in low esteem”.
Mr Resnik’s comments echo earlier warnings by Vanguard head of market strategy and communications Robin Bowerman.
Mr Bowerman told InvestorDaily on 15 August that the median SMSF portfolio carries about twice as much risk as the typical institutional growth fund.
For Mr Resnik, the risk tolerance of the end SMSF investor is the most important factor.
“SMSF investors seem to be taking on more investment risk than they might naturally accept if they invested consistently with their risk tolerances,” he said.
“Taking into account the Australian tax and social security systems, and often large SMSF account balances, they may also be taking on more risk than needed to achieve their goals.”
