Refuting the Productivity Commission’s claim earlier this year that Australian Prudential Regulation Authority (APRA) regulated funds outperform self-managed superannuation funds (SMSFs), Class has released data that it says more accurately compares the two fund types to put the latter on top.
Class said that the Commission utilised inconsistent formulae, as the Australian Taxation Office’s (ATO’s) Return on Assets (ROA) for SMSFs and APRA’s Rate of Return (ROR) for its funds were misleading when compared to each other.
The software company’s like-for-like analysis of ROA showed a 5.59 per cent return for SMSFs versus 4.98 per cent for APRA funds, while comparison of ROR data showed average returns of 6.71 per cent for SMSFs and 5.58 per cent for APRA funds.
“The competing approaches used to report super performance deliver significant differences and given the dual regulators are responsible for an industry worth over $2.5 trillion, it’s time for APRA and the ATO to agree on a consistent approach to fund performance reporting,” Class chief executive, Kevin Bungard, said.
Also worth noting was that the 6.71 per cent average return for SMSFs outperformed the Productivity Commission’s benchmarks for both listed and listed plus unlisted assets.