Super funds in default mode outperform SMSF
If you take a less-than-intense interest in where your superannuation is parked, there is comfort in a new report.
The average default funds are outperforming self-managed super funds (SMSF), according to SuperGuard 360.
In the 12 months to the end of October, SuperGuard 360 found that the average default fund returned 12 per cent, while SMSF returned 10.2 per cent.
Default funds also outperformed SMSF over the past five and 10 years – 9.7 per cent compared with 7.6 per cent per annum over five years, and 4.6 per cent compared with 4.4 per cent for 10 years.
Over 10 years, the SMSF member would have grown a $100,000 investment into around $154,000 while someone in the average default investment option would have grown a $100,000 investment into around $157,000, the report explains.
The default option is the ready-made investment category for people who make no decision on how their funds should be directed. SMSFs, meanwhile, are set up and run by those who seek more control over their retirement savings.
I have both – an industry super fund and an SMSF. I set up the SMSF about a year ago. It cost me $1000. I had done my research and decided that was the way to go as I intended to invest in property. I should have done more research than I initially did, as the SMSF is empty and my industry super fund, in balanced mode, is doing well.
I decided not to go down the SMSF road because I wasn’t prepared to commit the necessary time to doing it well enough so it would deliver better returns than my industry fund. In the end, I was honest with myself. Maybe I’m lucky that it only cost me $1000.
What’s your view on an SMSF?
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