The 12-month return for the entire self-managed super fund (SMSF) sector, represented by the SG360 SMSF Reference Index, to the end of August 2018 was around 11.0 per cent before fees and tax, which compared with the SG360 Default Index’s return of 10.9 per cent, the latest results from SuperGuard 360 showed.
This was the fourth consecutive month in which the Reference Index outperformed the Default Index, the latter index based on the returns from default MySuper products, SuperGuard 360 said.
Over three years the returns of the reference index and the default index were similar, the index provider said, with the Reference Index return at 8.4 per cent per annum compared with the Default Index return of 8.3 per cent per annum.
Over five years the Default Index still has a significant edge of 1.2 per cent, or 8.5 per cent per annum versus 7.3 per cent per annum, SuperGuard 360 said.
Given the small size of three quarters of SMSFs and their higher weightings to cash and lower weightings to equities than their larger, higher-performing SMSF peers which hold the majority of SMSF assets, SuperGuard 360 explained that the majority of SMSF members are in funds likely to achieve “lower than ideal” investment outcomes.
“To ensure their retirement savings last as long as they do, SMSF members should review the amount they pay in fees and benchmark their portfolio to ensure it is achieving the returns they are expecting,” the index provider said.