SMSF investments outperform MySuper for third month running

Investments held by SMSFs have outperformed those of large MySuper funds for the third month running, according to data from SuperGuard 360.

SuperGuard compares the performance of SMSF investments – based on ATO statistics – to the portfolios of MySuper superannuation funds. July 2018 was the third consecutive month in which SMSFs had outperformed MySuper. Though prior to May 2018 MySuper had outperformed for “almost two years”, according to SuperGuard.

For the 12 months to July 2018 the SG360 SMSF Reference Index (SMSFs) returned around 10.5% before fees and taxes, compared to 10.2% for the SG360 Default Index (MySuper).

SMSFs also outperformed MySuper over three years – 7.0% p.a. versus 6.8% p.a. However MySuper outperformed over longer periods – 8.4% to 7.3% over five years and 6.4% to 6.0% over 10 years.

“Three quarters of all SMSFs are small having assets less than $1 million. These funds, according to official ATO figures, have much higher weightings to cash and lower weightings to equities than larger higher performing SMSFs which hold the majority of SMSF assets,” said SuperGuard 360.

“This means that the majority of SMSF members are in funds likely to achieve lower than ideal investment outcomes. To ensure their retirement savings last as long as they do, SMSF members should review the amount they pay in fees and benchmark their portfolio to ensure it is achieving the returns they are expecting. If they are achieving lower investment returns than the benchmark it is important they understand why.”

SuperGuard 360 provides services to SMSFs, and is owned by Rainmaker Information.

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