SMSF portfolios continue to underperform

13 February 2018
| By Oksana Patron |
image
image
expand image

Self-managed superannuation funds (SMSFs) are expected to continue to underperform as a result of lower asset class weightings to growth assets especially international equities, according to SuperGuard 360.

The company said that its latest SMSF performance indices showed that for the 12 months to 31 December, 2017 the SG360 SMSF reference index returned 9.2 per cent, underperforming the 10.5 per cent achieved by the SG360 default index which was based on MySuper products.

Also, over 10 years both the SG360 SMSF reference index returned 4.8 per cent per annum, slightly underperforming the SG360 default index which returned five per cent per annum.

At the same time, over the five-year period the gap was more in favour of the SG360 default index (9.6 per cent per annum versus 7.8 per cent per annum), the company said.

As a result, over 10 years the portfolio of the SMSF member would have grown a $100,000 investment into around $160,000 and someone in the average workplace superannuation default investment option would have grown a $100,000 investment into around $160,000.

Also, according to SuperGuard 360, smaller SMSFs which traditionally held lower allocations to equities were more likely to underperform by an even wider margin.

The SG360 SMSF reference index describes the post-fee investment return a SMSF trustee would receive in their account if they invested passively using the asset allocation represented by SMSF asset distribution published by the Australian Taxation Office (ATO).

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

10 months 1 week ago
Kevin Gorman

Super director remuneration ...

10 months 2 weeks ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

10 months 2 weeks ago

The profit-to-member super funds are officially operating as a merged entity, set to serve over half a million members. ...

1 day 17 hours ago

Super Review announced 21 winners at the annual Super Fund of the Year Awards, including the recipient of the prestigious Fund of the Year Award....

2 days 8 hours ago

APRA data shows the CFMEU accounted for 28 per cent of super fund industrial contributions, with the shadow treasurer calling for a prompt investigation into the payments...

3 days 12 hours ago