Weaker returns for SMSFs: Rainmaker

Self-managed super funds delivered lower returns compared to MySuper products in the 12 months to April, according to Rainmaker's SuperGuard 360 SMSF performance index.

The SG360 SMSF reference index generated a return of 10.3%, slightly underperforming the default MySuper index of 11.1%.

Lower returns were driven by differences in asset allocation, which made "a material difference to relative returns," Rainmaker said. The SMSF index had higher weightings in cash and property, and a lower allocation to equities compared to MySuper products (39% versus 53%).

Returns for both strategies was more than 10% for the year - about four times the rate of inflation, indicating the importance of maintaining a well-run superannuation solution and to regularly monitor its performance.

Over a 10-year period, the SG360 SMSF reference index returned 4.9% per annum compared to the default index of 4.7%. To illustrate this, an SMSF member who invested $100,000 a decade ago would now have an estimated $164,632 in their account (see Graph 1).

Over a five-year period, the default index outperformed by 1.6%.

Despite the conservative investment nature of SMFSs, if well managed they are just as efficient at delivering investment outcome compared to regular super funds, Rainmaker said.

Read more: SMSFRainmakerLowerMySuperSuperGuard
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