Note: The ATO publishes an annual report about SMSFs for each financial year. This article covers the latest SMSF performance data available from the ATO, as at February 2015. The ATO will provide updated performance data (for year ending 30 June 2014) in late 2015.
A common argument put forward against individuals starting a self-managed super fund is that budding SMSF trustees could lose their hard-earned super savings through inexperienced investing, and bad investment decisions. Until relatively recently, there wasn’t much evidence confirming or denying this ‘world view’ mainly proffered by the large super fund sector.
The ATO now publishes SMSF performance data and the real story is quite startling. SMSFs had outperformed the large fund sector (corporate, industry and retail funds in four years out of seven. Due to updated performance figures for the 2012 financial year however, the large fund sector slightly outperforms SMSFs for that year (delivering 0.6% compared with 0.3% for SMSFs). With the adjustment to the performance figures for the 2012 financial year, the large fund sector can now claim to outperform SMSFs 4 years out of seven.
SMSFs outperformed large super funds for the three years ended 30 June 2007, 30 June 2008, 30 June 2009, but large super funds performed better for the years ended 30 June 2010, 30 June 2011, 30 June 2012, and 30 June 2013.
Note: For the year ended 30 June 2011, SMSFs delivered 7.7% and large funds delivered 7.8%: a difference of one-tenth of 1 per cent, which means the ‘winner’ over 7 years to be a little unclear.
SMSFs outperform over the long term, on average
The figures become even more interesting when you look at the average annual return over the 7-year period that the statistics cover. Based on the figures in the table below, the average annual return over the seven-year period to 30 June 2013, is:
- 4.33% a year, for SMSFs
- 3.69% a year, for large super funds.
In anyone’s language the long-term averages listed in the bullets above are not impressive for either category of super fund, but note that the Global Financial Crisis occurred during this period.
We will be able to get a better sense of long-term investment performance when the ATO releases the 2014 and 2015 financial year performance data.
|Financial year||SMSFs (%)||Large funds (%)||Outperformer|
|2008||-5.9% (loss)||-8.1% (loss)||SMSF|
|2009||-6.7% (loss)||-11.5% (loss)||SMSF|
Note: While the methodology used to estimate SMSF performance resembles APRA’s, the data collected is not the same. The data in the table above is sourced from five ATO reports: SMSFs – A statistical overview 2012-2013, SMSFs – A statistical overview 2011-2012, SMSFs – A statistical overview 2010-2011, SMSFs – A statistical overview 2009-10, and SMSFs – A statistical overview 2008-09.
Source: Table created by SuperGuide using ATO performance data.
For more information on investment performance and asset allocation see the following related SuperGuide articles:
- SMSF confidential: the inside story on DIY super funds
- SMSF investment: Three most popular asset classes, and the rest
- Asset classes: Naming the investment winners for the 2014 calendar year
You can also check out the following ATO reports on the ATO website:
- Self-managed super funds: A statistical overview 2012-13
- Self-managed super funds: A statistical overview 2011-12
- Self-managed super funds: A statistical overview 2010-11
- Self-managed super funds: A statistical overview 2009-10
- Self-managed super funds: A statistical overview 2008-09
Copyright for this article belongs to Trish Power, and cannot be reproduced without express and specific consent.