ASIC confirms SMSF negative returns

The Australian Securities and Investment Commission has told the House of Representatives Standing Committee on Economics that SMSF's below $200,000 have a negative return on assets.

Providing the most recent data from the ATO, ASIC answered the question which had been put on notice late last year.

The parliament had asked ASIC commissioner Danielle Press if SMSFs with a value under $200,000, on average, produce negative returns.

ASIC said: "For the period 2016-17 (and the preceding two financial years), SMSFs with a balance of less than $200,000 had a negative return on assets (ROA) when compared to SMSFs with a balance of more than $200,000."

"In 2016-17, the ROA for SMSFs with a balance of more than $100,000, but less than $200,000 was -0/48%, whereas the ROA for SMSFs with a balance of more than $200,000, but less than $500,000 was 4.65%."

It should be noted, the 2016-17 statistical overview provided by the ATO is the most recent on record.

Regulatory bodies like the ATO have been warning advisers for some time now about the risks associated with low-balance SMSFs, encouraging a higher level of diversification.

Last year, the ATO wrote to over 17,000 SMSF trustees warning them their SMSF did not meet diversification requirements.

Read more: SMSFATOASICHouse of RepresentativesDanielle Press
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