• Investment performance

    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 2012 was positive (1.0%), although noticeably lower than the 7.7% ROA in the two years ended 30 June 2010 and 30 June 2011. Positive ROA occurred after two years of negative returns in the years ended 30 June 2008 and 30 June 2009 (–5.9% and –6.7% respectively).35

    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 2012 (APRA reported –8.1%, –11.5%, 8.9%, 7.8% and 0.5% respectively).36

    Graph 16: Average return on assets for SMSFs and APRA funds

    Graph 16: Average return on assets for SMSFs and APRA funds

    Graph 17 shows the majority of SMSFs experienced a negative ROA for the years 30 June 2008 and 30 June 2009 (69% and 71% respectively) while 78% of SMSFs in 2010 and 81% in 2011 had a positive ROA. However in 2012, while 53% of SMSFs had a negative ROA, 32% had a ROA of between greater than 0% and 5%.

    Graph 17: SMSF return on assets

    Graph 17: SMSF return on assets

    The estimated SMSF ROA continues to show a direct relationship between SMSF size and the ROA. Generally, the larger the SMSF 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 2012. On average, SMSFs with more than $100,000 in assets had a positive ROA in 2010 and 2011, while in 2012 SMSFs holding greater than $500,000 had a positive ROA.

    ROA improved across all fund sizes in 2010 compared to the preceding two years, coinciding with the improved confidence in economic conditions. Generally in 2011 there were no major shifts, with the ROA for SMSFs remaining at 2010 levels. In 2012 SMSFs did not perform as well as in 2010 and 2011 and for SMSFs with assets of $1 to $50,000 the negative ROA was similar to 2008 and 2009 levels.

    Graph 18: SMSF return on assets, by fund size

    Graph 18: SMSF return on assets, by fund size

      Last modified: 16 Dec 2013QC 37999