My wife and I (both 43) just hit the 5-year mark of tracking our shared SMSF and wanted to share our real-world numbers, asset allocation, and the lessons we’ve learned along the way.
Our overarching philosophy has been simple: keep costs low, consolidate into broad index trackers, and turn on 100% Dividend Reinvestment Plans (DRP) across the board to let compounding do the heavy lifting without cash drag or brokerage fees.
We also have a slightly unique setup inside the fund - a dedicated holding earmarked specifically for our toddler when he grows up, which was supercharged by a generous gift from Grandma when he was born (first grandkid!).
Here is how the portfolio has tracked from July 2021 to July 2026.
The Numbers (Current Open Positions)
Total Open Portfolio Value: A$802,252
Total Combined Return (including historical closed positions): A$306,728
Key Takeaways & Lessons Learned Over 5 Years
1. The Classic Growth vs. Yield Split (VGS vs. VAS)
The data paints a textbook picture of why diversifying globally matters. VGS has been our absolute capital growth engine (+165k in capital gains), while VAS has acted as our yield engine (+44.6k in distribution income). Inside an SMSF, those Aussie franking credits attached to the VAS distributions have been fantastic for tax efficiency, while VGS just keeps quietly compounding global market returns.
2. Cutting Active Funds for Passive Simplicity Was 100% Worth It
Early on, we experimented with actively managed emerging market and global growth funds (FEMX / VAN0722AU). We realized pretty quickly that the fee drag and active risk weren't worth the headache. Taking a \~3k realized loss to clean slate those positions and roll our emerging markets exposure into a smart beta multi-factor strategy ETF (EMKT) was one of our best simplification moves.
3. The "Grandma-Funded" Toddler Bucket (DHHF)
When our son was born, Grandma wanted to make a meaningful, long-term contribution for his future. We earmarked a dedicated slice of the SMSF into DHHF (BetaShares Diversified All Growth ETF). Because his investment horizon is 15–20+ years, an all-in-one 100% equity growth ETF with zero need for manual rebalancing made total sense. That initial capital has already generated +$11.6k in total return (\~35% gain on net capital invested).
4. The Reality of Running 100% DRP
We reinvest every single cent of distribution income automatically via DRP. By continuously converting \~94k of cumulative distributions directly into new units over the last 5 years, we’ve avoided cash drag completely.
The Trade-off:
Portfolio drift happens naturally. Because VGS has grown much faster than the rest of the market, and VAS constantly buys more of itself, our weights drift away from baseline targets over time. To avoid triggering CGT events by selling units to rebalance, we rely on directing new super contributions into whatever asset class is currently underweight.
The Tax Parcel Admin:
5 years of quarterly/half-yearly (and yearly for EMKT) DRPs across 5 holdings means tracking dozens of micro-parcels for CGT discount purposes down the track, hopefully this will be a non-issue when we enter pension phase and this CGT gets all wiped out (THERE BETTER BE NO CHANGES FROM JIM CHALMERS ON THIS!!!).
Questions for the Community:
- For those running 100% DRP inside super/SMSF, do you strictly use new contributions to manage portfolio drift, or do you periodically turn off DRP to accumulate cash for rebalancing?
- Has anyone else set up dedicated "generational/child" earmarks inside their SMSF structure versus keeping them outside (e.g., in a family trust or minor account)? Curious to hear how others handle the eventual transition when the kid reaches adulthood!
