The self-managed superannuation fund (SMSF) sector has underperformed the average default MySuper product by 1.2 percentage points for the year to the end of April 2018, according to Superguard 360.
The SMSF sector as a whole, represented by the SG360 SMSF Reference Index, to the end of April 2018 was around 6.6 per cent before fees and tax, which compared with the SG360 Default Index which returned 7.8 per cent.
Superguard 360 said the lower performance by SMSFs was due to lower asset class weightings to growth assets, especially international equities, with the 12-month return of international equities around 6 percentage points higher than Australian equities.
According to Superguard 360, three quarters of all SMSFs are small, having assets of less than $1 million. These funds, it said citing figures from the Australian Taxation Office, have much higher weightings to cash and lower weightings to equities than larger, higher-performing SMSFs which hold the majority of SMSF assets.
This means the majority of SMSF members are in funds likely to achieve lower than ideal investment outcomes, Superguard 360 said.
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 superannuation consultant said.
