Default super funds outperformed self-managed superannuation funds (SMSFs) in the year to last quarter’s end by two per cent before fees and tax, according to SuperGuard 360.
The SG360 SMSF Reference index showed returns of 5.4 per cent for the year to March 2018, as compared to 7.4 per cent for the SG360 Default Index, which represented MySuper products.
SuperGuard 360 put this down to SMSFs generally having lower asset class weightings to growth assets, especially international equities. The 12-month returns of international equities to last quarter’s end was around 10 per cent higher than that of their Australian counterparts.
The organisation said that three quarters of all SMSFs have assets under $1 million, and these funds have higher weightings to cash and lower weightings to equities than larger, higher-performing SMSFs.
It said that this meant that “the majority of SMSF members are in funds likely to achieve lower than ideal investment outcomes”.
A member of the super fund has approached ASIC to investigate potentially misleading or deceptive representations by UniSuper regarding the holdings of its sustainable portfolios.
The median growth fund delivered 1.9 per cent in March, adding to the “stunning” rally that has seen super funds gain 11 per cent since November.
Vanguard has affirmed its support for the current super performance test, emphasising the importance of keeping the process straightforward.
While some superannuation funds have gone down the route of internalisation, others say they favour ‘smart partnering’ with external managers for diversification appeal.
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