I have a SMSF and I am in pension phase. 70% of the portfolio is in the banks – would you advise this? Being mostly income generated, which growth stocks, if any, would you advise?
A: Thanks for the question.
Notwithstanding that I am a huge fan of bank shares for tax advantaged income, my sense is that a 70% weighting to banks is too much. The 'financials' index in total makes up about 46.5% of the ASX. Of this, banks and insurance companies are 40%, with property trusts accounting for the balance of 6.5%.
Effectively, you are almost 100% overweight.
My suggestion is that you consider de weighting over time. Our income portfolio could be a guide if you are looking for potential sector weightings and/or stocks.
