Care must be taken when using SMSF performance figures, particularly when making comparisons. While the methodology used to estimate SMSF performance resembles APRA’s methodology, the data collected is not the same.
The estimated return on assets (ROA) for SMSFs in the year ended 30 June 2013 was the highest over the period (10.5%), and in positive terms for the fourth consecutive year (7.7%, 7.7% and 0.3% from 2010 to 2012 respectively). This trend follows the negative estimated ROA of -6.7% in 2009.
Graph 16 shows comparisons with ROA reported for APRA funds of more than four members. The ROA for APRA funds and SMSFs shows the same trend in estimated returns for the five years to 2013 (APRA reported: 11.5%, 8.9%, 7.8%, 0.6% and 13.7% respectively).
Graph 16: Average return on assets for SMSFs and APRA funds
Graph 17 shows the proportion of SMSFs by their estimated ROA, with an increase in 2013 to the proportion of funds experiencing positive ROA of greater than 10% (40% of SMSFs) and of greater than 5% to 10% (19% of SMSFs). For 2010, 2011 and 2013, majority of SMSFs experienced positive ROA (80% of SMSFs), while for 2009 and 2012, majority of SMSFs experienced negative ROA (approximately 71% and 53% of respectively).
Graph 17: SMSF return on assets
The estimated SMSF ROA continues to show a direct relationship with SMSF size. Generally, the larger the SMSF asset holding the more improved the ROA (see appendix 1, table 21).
Graph 18 shows the estimated average ROA by SMSF size for the five years to 30 June 2013. On average, SMSFs with more than $100,000 in assets had a positive ROA in 2013. By comparison, SMSFs with a positive average ROA in 2012 held greater than $1 million in assets.
Graph 18: SMSF return on assets, by fund size