SMSFs underperformed default MySuper options by a narrow margin in the 12 months to August, the latest Rainmaker SuperGuard 360 report shows.
The SG360 SMSF reference index, which measures the post-fee investment return of SMSF trustees, delivered slightly lower returns (7.4% pa) compared to the SG360 default index (7.7% pa), which tracks APRA regulated MySuper products.
Lower returns for the SG360 reference index was driven by differences in asset allocation, the report said, with the main reason being the allocation to property, particularly to Australian REITs, lost more than 7% in during the period.
SMSFs have an average allocation of 18% to property (although not all in REITs) compared with about 10% in MySuper products.
On a positive note, the SG360 SMSF reference index is closing in on the performance gap over the three-year and five-year time horizon of 1.2% and 1.9% respectively (see Graph 1).
Over a 10-year period, both indices returned 4.6% per annum. An SMSF member who invested $100,000 a decade ago would now have earned $156,870 - this is $849 more than a workplace superannuation default investment option.