Adelaide University researcher George Mihaylov (left) and SMSF Association chief executive John Maroney.

Self-managed superannuation funds with over $200,000 in assets perform “on par” with APRA-regulated funds according to research from the University of Adelaide.

The SMSF Association commissioned the Understanding self-managed superannuation fund performance study, which found the Australian Tax Office’s calculation of SMSF yield produced lower estimated investment returns compared to APRA’s method for its regulated funds.

The difference arose because the ATO’s calculation was based on data derived from SMSF annual returns, as opposed to information from super fund financial statements which was APRA’s preferred method.

“The published performance results from the ATO for the SMSF sector understate actual performance,” Adelaide University lead researcher George Mihaylov said.

The study showed negligible difference in returns between SMSFs and APRA-regulated funds between 2017 and 2019 (below).

2017 2018 2019
All SMSFs 6.9% 6.0% 6.2%
APRA funds 7.8% 7.6% 6.2%
SMSFs with over $200k and less than 80% cash or term deposits 8.0% 6.6% 6.5%

Source: Understanding self-managed super fund performance, Adelaide University

The research also found there was no difference in performance patterns for SMSFs between $200,000 and $500,000, a similar finding to a Rice Warner report commissioned in 2020.

“This notion that small SMSFs do worse than larger SMSFs doesn’t hold at the $500k benchmark,” Mihaylov said.

“I found it quite remarkable that our research similarly points to the same level of minimum fund efficacy [as the Rice Warner research].”

Ralf Zurbruegg

Ralf Zurbruegg, who also conducted the research, said his conclusion was there was no definitive “better” option between SMSFs and APRA-regulated funds, but the research couldn’t identify why funds under $200,000 don’t perform as well.

“We have noted funds that are $200,000 in size perform as well as larger ones, but those that are smaller don’t,” Zurbruegg said. “The question is: why?”

The report also concluded that SMSFs generated greater variation in returns compared to APRA-regulated funds, which showed the need for professional advice and proper investment strategy.

John Maroney, SMSF Association chief executive, said the study highlighted the strength of the industry that boasted 1.1 million members with $800 billion in funds under management.

“The research shows SMSFs are not just for the wealthy,” Maroney said.