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MySuper funds tipped to outperform SMSFs
New research has predicted that many SMSFs are likely to underperform this year when compared with MySuper funds.
Investment Trends' 2015 Member Sentiment and Communications Report, which is based on a survey of 16,049 super fund members, said many SMSFs are likely to underperform MySuper funds this year since their average exposure to overseas listed equities is just seven per cent of assets on average.
By comparison, MySuper funds have an average exposure to overseas listed equities of 31 per cent.
“Australian shares have provided good returns this year when dividends are taken into account, but not as well as overseas markets,” the report stated.
“Super funds with a significant allocation to unhedged overseas assets have a very strong story due to the strong growth in overseas sharemarkets and the decline in the Australian dollar. These positive returns should have a positive impact on sentiment when statements arrive,” the report said.
The cash holdings of SMSFs are also much higher – at 21 per cent – while the average cash exposure of MySuper funds is just four per cent.
The report also found that member satisfaction overall has declined in line with confidence.
“Members are asking the manager of their retirement funds to provide direction and reassurance about their individual retirement situation,” said Irene Guiamatsia, analyst at Investment Trends.
“Our research also shows that when super funds are able to engage their members’ interest, they are more satisfied and also more confident about the future, and therein lies the opportunity.”
Pick the "right" time period and you can prove whatever argument you care to make e.g. in the 2010-2011 financial year, 24 year old super members had higher returns than 50 year old members(???).
Did you know that 73% of all statistics you read on the internet are made up?0- Please repeat this article in 2-3 years again.0
- This is nice when the going is good. It was not that long ago when the reverse was the norm, losses on international shares because of currency fluctuations, no matter how well the overseas markets were doing. The profit has been in the exchange rate movements with a small amount on the shares and most SMSF are not going to gamble in a big way on that. Tell me how much you have made on the exchange rate going up and back down - I would suggest that it is not positive yet.0
- While it is only an implied criticism , Katarina's short article persists with the meaningless comparison between large pooled funds with 30+ year time horizons and small, less than 4 member funds that are focussed on the needs of members likely to be over 50 years of age and in many instances in pension paying mode. SMSF's also may have tailored asset allocations to take into account the health of their members.
As a retired adviser , I can understand that cash holdings are virtually the only asset to hold at the end of a 30 year environment of falling inflation and interest rates. Only a large pooled fund with 30+ year time horizons would punt on longer dated fixed interest investments.
Due to low costs , SMSF's can still protect member's assets from inflation with term deposits and cash and maybe should do so for a number of years rather than run towards last years returns in fixed interest/bond returns.0
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