SMSFs outperforming MySuper: Research

The self-managed super fund sector outperformed MySuper returns for the third consecutive month, latest SuperGuard 360 data shows.

SMSF performance, as represented by the SG360 SMSF Reference Index, delivered 10.5% per annum (before fees and tax) in the year to July 2018.

Meanwhile the SG360 Default Index, which tracks the performance of default MySuper products, returned 10.2% per annum.

Over a three-year period, returns for both the SMSF (7%) and MySuper (6.8%) sectors were almost on par.

Over five years however, MySuper had a significant edge at 8.4% compared to the SMSF sector's return of 7.3% per annum.

Based on ATO data, three-quarters of SMSFs have assets of less than $1 million. Such funds have a higher weighting to cash and lower allocation to equities than larger, better performing SMSFs.

This means that the majority of SMSF members are in funds likely to achieve lower than ideal investment outcomes, SuperGuard 360 said.

SuperConcepts figures show SMSFs are increasingly shifting away from cash to Australian equities.

Cash and short-term deposits dropped from 19.8% to 17.3% in the 12 months to June 2018, according to a survey of 2600 SMSFs.

In CommSec's  latest SMSF trading report, SMSF investors are increasingly turning to international equities for greater diversification and returns.

Amazon, Apple, Facebook, Tesla and Berkshire Hathaway are the top five international stocks by trading value, while Alphabet Class A replaces Tesla in the top five when it comes to holdings.

APRA's June 2018 statistics show MySuper continued to grow at a faster rate than other segments of superannuation, comprising 25% of the asset pool.

MySuper assets grew 13.6% to $675.6 billion over the period. Australia's total retirement savings reached a record high of $2.7 trillion.

Read more: MySuperSuperGuardAPRASG360 Default IndexSG360 SMSF Reference Index
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