Despite heightened geopolitical tensions, US President Donald Trump’s tariff turmoil and ongoing volatility, Australian shares delivered for investors in the year to June 2025, with the benchmark ASX 200 index up 10%.
That was sure to keep SMSF investors happy, as domestic shares remain their preferred asset class. Over 59% of Class SMSFs hold direct Australian shares, representing 27.5% of their assets.
The next largest asset class by value among Class SMSFs is direct property (21%), followed by cash and term deposits (about 15%). Cash holdings are relatively high because every SMSF must have a bank account.
The most popular stocks among SMSFs are household names Australians have grown up with – think the big four banks (representing 43.5% of the top 20 by market value), mining heavyweights BHP and Woodside, Telstra and the big retailers Wesfarmers, Coles and Woolworths. They offer investors an opportunity to buy shares directly in companies they believe will deliver long-term returns.
Buying shares directly also allows individual investors to build their own diversified portfolio across a range of industries according to their own needs for long-term growth, create a sustainable income stream from dividends and reap the tax advantages of dividend franking credits.
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The average dividend yield of Australian shares was around 3% in June 2025, or close to 4% when franking is included, although many shares in the top 20 yield significantly more. Yields fell over the year due to the rise in share prices (yields rise when prices fall).
For all these reasons, direct holdings in Australian shares are the most popular investments among SMSFs (excluding cash and term deposits), with 59.1% of Class funds holding them. Many Class funds also hold shares via managed funds and exchange-traded funds (ETFs), the only asset class to gain popularity in the 2025 financial year, with 34.1% of funds now holding them, up from 32.8% previously.
Of course, picking shares and monitoring them takes time and effort, but it does have the potential to grow wealth in the long run. And because all earnings on investments in your super fund must be preserved until you retire or reach another condition of release, capital gains and dividend income must be reinvested within your fund, where they compound over time.
According to Class data, as of 30 June 2025, direct investment by SMSFs in domestic listed securities is heavily concentrated in blue chip stocks that tend to mirror the ASX top 20 listed companies.
The top 20 list below is ranked by popularity (the percentage of SMSFs that hold these shares), rather than the percentage value of assets that all SMSFs have invested in those shares, although both figures are provided in the table.
The 20 most popular Australian shares invested in by SMSFs
| Rank | Security code | Description | % of funds with domestic shares that hold this security | % of total SMSF domestic share investments |
|---|---|---|---|---|
| 1 | BHP | BHP Group Limited | 49.0% | 3.9% |
| 2 | WDS | Woodside Energy Group LTD | 41.8% | 1.6% |
| 3 | WBC | Westpac Banking Corporation | 36.7% | 4.0% |
| 4 | NAB | National Australia Bank Limited | 36.2% | 4.1% |
| 5 | ANZ | Australia And New Zealand Banking Group Limited | 36.1% | 3.0% |
| 6 | TLS | Telstra Corporation Limited | 35.7% | 2.2% |
| 7 | CBA | Commonwealth Bank Of Australia | 34.3% | 8.0% |
| 8 | CSL | CSL Limited | 33.2% | 3.0% |
| 9 | WES | Wesfarmers Limited | 30.7% | 3.3% |
| 10 | MQG | Macquarie Group Limited | 29.4% | 3.1% |
| 11 | WOW | Woolworths Group Limited | 25.0% | 1.1% |
| 12 | RIO | Rio Tinto Limited | 21.2% | 1.3% |
| 13 | COL | Coles Group Ltd | 19.0% | 0.8% |
| 14 | TCL | Transurban Group – Ordinary Shares/Units Fully Paid Triple Stapled | 17.6% | 1.0% |
| 15 | RMD | Resmed Inc – Cdi 10:1 Foreign Exempt NYSE | 17.2% | 0.9% |
| 16 | SHL | Sonic Healthcare Limited | 14.6% | 0.6% |
| 17 | STO | Santos Limited | 14.2% | 0.6% |
| 18 | S32 | South32 Limited | 13.5% | 0.3% |
| 19 | EDV | Endeavour Group Ltd | 13.5% | 0.2% |
| 20 | GMG | Goodman Group – Fully Paid Ordinary/Units Stapled Securities | 12.2% | 0.7% |
| Total (Percentage that the top 20 make up of total SMSF investments in Direct Domestic Shares) | 43.5% | |||
Source: Class. Data as of 30 June 2025. Data derived from 189,000 SMSFs that use Class software.
As you can see, direct investment by SMSFs is concentrated in the big four banks that take out four of the top six spots, with Macquarie Group also in the top 10. Mining heavyweight BHP retained its position as the most popular Aussie stock, with almost half of all Class SMSFs with domestic shares holding the Big Australian in their portfolios.
The only new entrant to the top 20 was industrial property developer Goodman Group, which replaced Amcor in 20th spot. Goodman Group has been expanding into data centres to capitalise on the AI boom.
While some companies have shuffled positions, the top 20 have been remarkably stable for several years.
After the rebound in prices in the final months of the 2025 financial year, Australian shares look fully valued at current levels. But against an economic backdrop of moderating inflation and lower interest rates, which traditionally increase the appeal of shares, the outlook for Australian shares remains positive.
Australia’s cash rate fell from 4.35% to 3.85% in 2024–25. A further cut in August reduced the rate to 3.6% – roughly in line with the yield on Australian shares – and more cuts are expected. That said, the total return (dividends and capital growth) from Australian shares is still far better than money in the bank.
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