APRA funds rebounded from COVID-19 better than SMSFs

Self-managed superannuation funds (SMSFs) have rebounded from COVID-19 market losses, but Australian Prudential Regulation Authority (APRA) regulated fund assets rebounded even more strongly, according to research from Investment Trends.

The ‘Vanguard/Investment Trends 2021 Self Managed Super Fund Report’ found that SMSF assets recovered to an all-time high of $787 billion, up from $694 billion in March 2020.

Irene Guiamatsia, Investment Trends head of research, said while SMSFs assets in aggregate rebounded back by 13%, APRA-regulated funds improved by 15%.

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“APRA-regulated performance will continue to be the yardstick against which trustees benchmark their SMSF performance going forward,” Guiamatsia said.

“That’s an important driver for keeping the relationship with the APRA-regulated super fund they have.”

Better returns were not the sole driver to set up an SMSF, as control, as well as property investing were key reasons.

Guiamatsia said there was a clear trend towards keeping an APRA-regulated fund for prospective trustees looking to set up SMSFs.

“In the past year, 44% of those prospective SMSF trustees intended to keep both, while 37% were undecided,” Guiamatsia said.

“There’s only a small tranche right now who are saying they intend to close their APRA-regulated funds when they set up an SMSF.”

The total number of SMSFs had continued to grow and there was over 597,000 active in Australia.

There was 22,663 newly established SMSFs for the year to March 2021 verses 22,071 for the year to March 2020.

“It’s to be commended that in such a time of disruption, we’ve seen the establishment rate actually continue at pace,” Guiamatsia said.

“If we go back seven years to around 2013, we’re seeing elevated establishment rates to the tune of 8% a year.”

In the last year there were over 11,000 SMSFs that were wound back, but that was one of the lowest numbers in the last six years.

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