How SMSF returns stack up

Which type of fund is better?

The most common reason people choose to set up an SMSF is to achieve better returns. Yet at the same time, large industry and retail super funds argue that SMSF performance is lower (due to higher fees). 

The ATO recently started publishing SMSF performance data and a clearer picture is emerging – SMSFs and large super funds have produced similar returns over the last 10 years! But how exactly do SMSF returns compare to large super funds? 

ATO statistics

The ATO has been measuring SMSF returns and the published results showed that average SMSF returns were positive over the five years ending on 30 June 2016. Large APRA regulated super funds had similar performance of earnings over the same period. While large super funds fared slightly better than SMSFs over the timeframe, both types of super funds had the same 2.9% in returns.

The ATO data looks back over a number of years, but it will be some time before we see the next equivalent report. Let’s turn to a few more recent examples to see exactly how SMSFs have been performing.

Recent SMSF returns

It’s been a positive story for SMSFs in the past few years. Results provided to SMSF Adviser indicated that SMSF sector returns slightly outdid the performance of MySuper (large fund) offerings in the 2018 financial year. MySuper products are accounts offered by large super funds that are default funds for contributions. They usually represent the balanced or growth option within a large superannuation fund. 

Every SMSF is different 

It’s not entirely helpful to compare average SMSF returns because each SMSF is separately managed and there are usually both poor and outstanding investment performers among the pack. What’s more important is whether you will start your own SMSF and what you will invest in.

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