Building a diversified SMSF portfolio

This information is general in nature and does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for you.

When it comes to investing, you’ll hear the word diversification often, and although it may get tiresome, it’s one of the most important lessons investors need to learn. Global investors have a home bias, and that doesn’t change here in Australia. According to a survey by the ASX in 2023, 73% of Australian SMSFs hold Australian shares. Local shares offer franking credits, familiar names, and a market most Australians understand. But it does highlight that most SMSFs are heavily concentrated in a single domestic market that represents roughly 2% of global market capitalisation.

Over the 20 years to 31 December 2025, the S&P 500 delivered a total return of 786.7% in AUD terms (an annualised 11.53%), while the ASX200 returned 321.3% (an annualised 7.46%). That’s a gap of around 4% per year, compounded over two decades. When we’re talking about retirement, those are some pretty big numbers. Past performance is not a reliable indicator of future returns, but by missing global diversification, Australian SMSFs have historically also missed the sectors driving global growth.

Taking control of your super through an SMSF is about access to global markets, to thematic exposures, and to asset classes that traditional super funds can’t or won’t offer. The question isn’t whether you should hold Australian shares. The question is whether you should hold only Australian shares.

What the rules actually require

Every SMSF needs a written investment strategy, and the ATO is specific about what it must cover: risk and return objectives, diversification, liquidity, insurance needs, and how the fund will meet member benefits over time. If you choose not to diversify, you have to formally document that decision as a risk in your strategy. It’s a regulatory expectation, reviewed annually by your auditor.

Within those rules, trustees have enormous flexibility. The ATO does not tell you what to invest in. It just expects you to think carefully about why.

Building the portfolio: what SMSF trustees can actually hold

The universe of SMSF-eligible assets is broad. Common holdings include:

Australian and international shares
ETFs (local and global)
Crypto assets
Real estate, including commercial property
REITs (Real Estate Investment Trusts)
Cash, term deposits, and bonds
Commodities

Most trustees don’t use all of these. The right mix depends on your time horizon, risk tolerance, and the goals you’ve documented in your investment strategy. But there are a few asset categories worth thinking about for any SMSF looking to move beyond the Australian shares default.

International shares: Global shares give you exposure to industries and companies that the ASX struggles to offer in any meaningful way. Semiconductors, large-scale AI, global consumer brands, US healthcare innovators. If your strategy is built for the long term, the case for global diversification is hard to ignore.

ETFs: ETFs let you take a diversified position across a sector, theme, or index in a single investment. They’re efficient, transparent, and often lower cost than building equivalent exposure through individual shares. For SMSF trustees, ETFs are a way to add diversification without adding hours of research.

Crypto: Around 12% of SMSF investors now hold crypto, according to the ASX’s Investor Survey and that’s because we’ve seen the asset class matured significantly. It’s not a fit for every fund, and the volatility is real, but for trustees who’ve thought carefully about position sizing, a measured allocation is increasingly part of the conversation.

Thematic exposure: Through eToro’s Smart Portfolios, trustees can take a single position that gives exposure to a curated theme such as artificial intelligence, quantum computing, or space tech. It’s a way to access ideas that would otherwise require deep individual stock selection.

Copying top investors: One of the things that genuinely differentiates eToro for SMSF trustees is the ability to copy top investors from around the world.

You can browse over 5,000 investors on the platform, each with a unique strategy, risk level, and transparent track record. Once you find one whose approach matches your strategy, you choose how much to allocate (the minimum is $200) and hit copy. From that point on, whenever they open or close a position, your portfolio mirrors the move in direct proportion.

The investors you copy are putting their own capital behind every trade. You’re not following a paper portfolio or a model, you’re following someone who’s invested alongside you.

Crucially, copying another investor on eToro is free. There are no performance fees, no management fees, and no platform fees on top of standard trading costs. The investors you copy get paid directly by eToro through the Popular Investor Program, not by you. Standard trading costs including spreads apply to copied trades. See the fee schedule for details.

For SMSF trustees, the value isn’t replacing your own decision-making, it’s complementing it. Copying a top investor can sit alongside your core holdings as a way to access ideas, styles, or markets you wouldn’t otherwise be confident managing yourself. Some trustees use it to track a global-equity investor whose approach matches their strategy. Others use it for thematic exposure outside their expertise.

What eToro SMSF clients actually hold.

The most widely held instruments across eToro SMSF accounts give a real-time view of how trustees are diversifying.

Bitcoin is the single most widely held instrument across all eToro SMSF accounts at the time of writing. More broadly, crypto accounts for four of the top ten most-held instruments, with Bitcoin, Solana, XRP and Ethereum all featuring prominently. Stocks make up the other six spots with Tesla, Strategy Inc, ResMed, Samsung, NVIDIA, and Alphabet.

Crypto assets are highly volatile. Past performance is not a reliable indicator of future performance. This data reflects the holdings of eToro SMSF clients and does not constitute a recommendation.

The pattern shows that the assets eToro SMSF clients hold most often are overwhelmingly global and, in many cases, would be difficult, restricted, or unavailable through a traditional retail or industry super fund.

Reviewing as you go

A diversified portfolio isn’t static. The ATO requires you to review your investment strategy at least once a year, but in practice, most trustees revisit it more often. Market corrections, a new member joining the fund, a member transitioning to pension phase, or a major shift in your personal circumstances are all valid reasons to look again.

The discipline of regular review is one of the underrated benefits of running an SMSF. It forces you to stay engaged with your retirement savings in a way that default super funds simply don’t.

Why the platform you choose matters for diversification

The strategy you put on paper is only as good as your ability to execute it. That’s where eToro comes in. eToro is Australia’s all-in-one SMSF investing platform, giving trustees access to 400+ Australian stocks and ETFs, 7,000+ global stocks and ETFs across 20+ exchanges, cryptoassets, Smart Portfolios, and CopyTrader, all in a single account.

For trustees who want to build a genuinely diversified SMSF portfolio without managing multiple platforms, that breadth of access matters. All SMSF users on eToro are automatically placed in the Gold Club tier, which includes a dedicated account manager, lower fees, and additional support features.

Ready to put your strategy into action?

If you’ve thought through your investment strategy and you’re ready to start building, eToro gives SMSF trustees the access, tools, and transparency to do it across local and global markets in one account.

Already have an SMSF? Eligible SMSF clients can earn up to USD$30,000 cashback on net deposits (new customers only; a minimum USD$10,000 deposit is required to open an eToro SMSF account, with terms and conditions applying).

Book a call with the team to discuss the next steps of taking control of your retirement.

Don’t have an SMSF yet? eToro has partnered with Intello, one of Australia’s leading SMSF administrators, to offer eToro clients a discounted setup fee of A$990 and up to 20% of administration and account fees based on your eToro Club tier.

This guide has been put together with insights from Intello.com.au

eToro AUS Capital Limited ACN 612 791 803 AFSL 491139 and eToro Asset Management Limited ABN 51 122 005 396 AFSL 319738. eToro is a multi-asset investment platform. The value of your assets may go up or down. Crypto assets are unregulated and highly speculative. There is no consumer protection. Your capital is at risk. See PDS and TMD. T&Cs apply.