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).
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.