The median return was a low 3%. The All Ordinaries (only one segment of a fund's investment) returned -4.97%, so not all bad. The top was QSuper (balanced) at 7.6%, the 10th was AustralianSuper (balanced) at 4.5%.
Over the past ten years the best CAGR was 6.6% for Rest (Core).
These numbers make me very happy I have a SMSF!
As is usual, this report completely fails to detail how the returns were calculated and so could be misleading. As many funds (the for profit ones) try to inflate their end of year results to increase their management fees and attract new customers, the article should address the valuation/return calculation.
The obvious examples of taking the most optimistic value include:
management fees - included or excluded?
timing of asset valuations with respect to capital inflows - are returns effectively normalised to inflows
valuations with respect to the buy/sell spread for equities. It is industry norm to value shares on "closing price" (and there are logical arguments as to why that is the case). But, in reality, shares can only be sold at the current "Buy" price. This alone can lead to about a 1% difference in valuations.
timing of crediting of dividends/distributions/interest payments.
treatment of tax liabilities - both contingent and provisions
choice of valuation base - what are you basing the growth figure on? Size of fund at the beginning of the year, in which case there is a greater than normal earning capacity due to capital inflows during the year, or a weighted return on capital employed?
The list goes on and on. Some of these are trivial, others are fundamental. Some are covered by industry norms/guidelines, some are not (it would be good to see these spelt out). Some funds use very sophisticated ways of measuring performance, others are more simplistic.
Either way, transparency and some granularity would be nice.
