A Rice Warner analysis of APRA and ATO statistics commissioned by NAB indicates that during the period from 2005 to 2012 SMSFs generated an average annual return of 7.7 per cent compared to the average 4.9 per cent return produced by the rest of the superannuation industry.
Taking fees into account SMSFs produced a return of 6.8 per cent over the eight years compared to 4.1 per cent for the rest of the superannuation industry.
NAB’s executive general manager banking and wealth solutions David Gell said the analysis shows that not only have a million Australians chosen to manage their own retirement savings, “they’re actually doing a particularly good job of it”.
“It is clear that SMSFs do rate very well in terms of performance against the other funds, contrary to some perceptions out there,” said Mr Gell.
He said while SMSF trustees are taking responsibility for their own retirement, they are also seeking out and paying for good advice.
“It’s clear that many members and trustees are fully prepared to pay for advice if they believe it’s worth doing so,” he said.
Hi Trevor, KCA & others
My superfund has been invested fully in shares for many years, even through the GFC. What I have found is that if we invest in quality stocks the GFC etc really has no effect over the long term. My fund (an SMSF) has outperformed every fund that I have surveyed. The GFC was a great opportunity to invest in quality stocks.
Industry and retail funds generally invest differently from SMSFs. They buy some very poor stocks (like Qantas) whereas I always buy a good quality stock.
Trevor, I think we cannot blame the beneficiaries of funds but rather the managers that invest in bad stocks That is a big reason why SMSFs have outperformed. The trustees of SMSFs have a real interest in their fund’s performance.
The fund managers invest in many stocks that are unworthy of your and my money.
I can prove all of my comments and will do so if you want.
My Grandad (who experienced 2 severe depresions) taught me to look after myself & my own money,suggesting,though -I seek advice when necessary. He said people I let manage it for me would always become richer than me. 75 years of keeping my eyes & ears open since have taught me he was extremely wise & I thank him !
My point being that asset allocation determines returns, not the extraordinary skill of 1 million SMSF members. APRA regulated funds had higher weightings to equities going into the GFC because that is where most Australians elected to put their money. All members have investment choice, remember. It’s not the funds’ fault that that is where members wanted their money invested.
Yep Trevor all those hundreds of thousands of trustees all luckily came to same decision not to invest heavily in shares. All down to luck not judgment at all. They are just so lucky those SMSF trustees.
It wouldn’t have anything to do with being underweight equities during the GFC now would it? Underweight by sheer luck.