$70 billion dividend payout with $10 billion to SMSFs

Australian investors have benefited from almost $70 billion in dividends throughout 2013-2014 with $10 billion going to self-managed superannuation funds, according to analysis by Credit Suisse.

Fairfax reports the dividend haul is a record $67.8 billion, up from $61.3 billion in 2012-2013.

“This is what investors want now, especially ‘selfies’ [SMSFs] who are collecting more than $10 billion of dividends themselves,” Credit Suisse equity strategist Hasan Tevfik told Fairfax.   

Jordan George, senior manager of technical and policy at the SMSF Professionals’ Association of Australia told SmartCompany his research shows that as of the end of 2013 SMSFs held 11.5% of market capitalisation of the ASX.

“If you look at that in context of a $70 billion flow of dividend, $10 billion to SMSFs seems right,” he says.

“We know SMSF investors have a preference for franked dividends as it helps them provide an income stream in retirement and that’s important to consider when we know 35% of SMSFs are in pension stage and are taking an income stream.”

George says SMSF trustees at the pension stage need to generate cash flow to fund paying a pension so dividends are important to maintain that.

“But it’s important to recognise for all super funds there are the same incentives to invest in franked dividends, it is not just an SMSF issue,” George says.