POWERED BY MOMENTUM MEDIA
SMSFs have dismal returns: ISA
Self-managed superannuation funds (SMSFs) with less than $2 million in assets are unviable as a retirement savings vehicle, Industry Super Australia (ISA) believes.
ISA analysis found that SMSFs with less than $2 million were likely to have performed well below its Australian Prudential Regulation Authority (APRA) regulated counterparts and that the average net return for an SMSF (with fewer than four members) in 2015 was 6.2 per cent.
ISA said this compared with 8.8 per cent for APRA regulated funds – 7.8 per cent for retail funds, and 9.7 per cent for an industry fund.
The analysis also found SMSFs with fewer assets performed significantly worse than those with more assets, and returns ranged from -16.9 per cent for funds with less than $50,000 in assets to 7.7 per cent for funds with over $2 million.
ISA said more than 80 per cent of SMSFs were of a scale that was likely to result in sub-standard performance.
ISA chief economist, Stephen Anthony, said: “The best performing SMSFs will have a diverse portfolio of assets, and scale to drive costs down; for most people this is aspirational”.
“We share the view that SMSF sector growth is being driven by sales efforts. It’s important that consumers look at the returns and fully understand what they’re signing up to,” he said.
Recommended for you
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
ASIC has sentenced former director Mudasir Mohammed Naseeruddin over four years imprisonment for ‘egregious conduct’ and dishonestly obtaining client funds from six investors’ SMSF accounts.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI First Close USD
73.88 3 y p.a(%)
2
Hills International
63.66 3 y p.a(%)
3
Acadian Global Equity Long Short Class A
36.33 3 y p.a(%)
4
CFS FC Acadian Global Equity Long Short
35.96 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
32.23 3 y p.a(%)
Add new comment