SuperGuard 360 SMSF performance indices

This was the fourth consecutive month in which the Reference Index outperformed the Default Index. The Default Index is based on the returns from default MySuper products.

Over three years the returns of the reference index and the default index were similar. The Reference Indexed returned 8.4%pa compared with the Default Index return of 8.3%pa. Over five years the Default Index still has a significant edge of 1.2%pa (8.5% pa versus 7.3% pa).

Three quarters of all SMSFs are small; having assets less than $1 million. These funds, according to official ATO figures, have much higher weightings to cash and lower weightings to equities than larger higher performing SMSFs which hold the majority of SMSF assets.

This means that the majority of SMSF members are in funds likely to achieve lower than ideal investment outcomes. To ensure their retirement savings last as long as they do, SMSF members should review the amount they pay in fees and benchmark their portfolio to ensure it is achieving the returns they are expecting. If they are achieving lower investment returns than the benchmark it is important they understand why.

The rise of US stocks continued in August 2018 with the S&P500 returning 3.3% in US dollar terms and 6.1% in Australian dollars.

On an annual basis the US market has been a clear winner with a 12-month return of 19.7% in local currency terms and 31.2% in Australian dollar terms. As most Australians have their international equities exposure either unhedged or partially hedged it’s the higher return that would have contributed to their equities returns.

Overall equities returns were, however, brought down to earth by the performance of the rest of the world’s share markets which suffered under the twin threats of trade tariffs and a stronger US dollar. This is weakening investors’ confidence in the economic growth prospects of many of the world’s developed regions and causing major falls in many emerging markets.

The biggest hit was to FTSE China A Shares which lost 6.1% during the month, bringing the 12-month return to negative 23%. Emerging markets lost 2.7% in August as measured by MSCI Emerging Market in USD. The one year returns for same index deteriorated to -0.3%. In Australian dollars, however, the 12-month return was 9.7%. European and Japanese stocks also lost during the month but 12-month returns remained positive.

Domestically, the broader equity market finished the month up 1.4%. The S&P ASX 200 Industrials rose 2.9% in the month and 15.4% for the year, while Resources fell 4.4% in the month and still managed a strong 12-month return of 21.5%.

The Bloomberg Ausbond composite monthly return was 0.8% and 3.8% for the 12 months to August. International fixed income returns were lower, rising by 0.3% in the month and 0.8% for the year.

The Australian dollar fell 2.7% against the US dollar to a 20-month low of 71 US cents down from 74 US cents in the beginning of the month and 79 US cents 12 months previously.

The rise of US stocks continued in August 2018 with the S&P500 returning 3.3% in US dollar terms and 6.1% in Australian dollars.

On an annual basis the US market has been a clear winner with a 12-month return of 19.7% in local currency terms and 31.2% in Australian dollar terms. As most Australians have their international equities exposure either unhedged or partially hedged it’s the higher return that would have contributed to their equities returns.

Overall equities returns were, however, brought down to earth by the performance of the rest of the world’s share markets which suffered under the twin threats of trade tariffs and a stronger US dollar. This is weakening investors’ confidence in the economic growth prospects of many of the world’s developed regions and causing major falls in many emerging markets.

The biggest hit was to FTSE China A Shares which lost 6.1% during the month, bringing the 12-month return to negative 23%. Emerging markets lost 2.7% in August as measured by MSCI Emerging Market in USD. The one year returns for same index deteriorated to -0.3%. In Australian dollars, however, the 12-month return was 9.7%. European and Japanese stocks also lost during the month but 12-month returns remained positive.

Domestically, the broader equity market finished the month up 1.4%. The S&P ASX 200 Industrials rose 2.9% in the month and 15.4% for the year, while Resources fell 4.4% in the month and still managed a strong 12-month return of 21.5%.

The Bloomberg Ausbond composite monthly return was 0.8% and 3.8% for the 12 months to August. International fixed income returns were lower, rising by 0.3% in the month and 0.8% for the year.

The Australian dollar fell 2.7% against the US dollar to a 20-month low of 71 US cents down from 74 US cents in the beginning of the month and 79 US cents 12 months previously.

SuperGuard 360 produces two performance indices useful for self managed superannuation fund (SMSF) investors, being trustee members of SMSFs:

SG360 SMSF reference index: This index describes the post-fee investment return a SMSF trustee would receive in their account if they invested passively using the asset allocation represented by SMSF asset distribution published by the Australian Taxation Office.

SG360 default index This index describes the post-fee post-tax investment return a SMSF investor would have achieved if they invested in the same way the typical Australian Prudential Regulation Authority (APRA) regulated MySuper product invests.


The generalised asset allocation used in each index is shown in the chart on page 2. Generally speaking SMSFs have a higher weighting to property than do MySuper options and a lower weighting to equities in general and international equities in particular. The index is reweighted at the beginning of each financial year to reflect changes in SMSF asset allocation.

The SG360 SMSF Reference Index is derived by the following capital market indices:

· Australian shares S&P ASX 300 Accumulation Index

· International shares MSCI Global Shares AUD Index

· Property Financial Standard Direct Property Index

· Fixed interest Bloomberg AusBond Composite 0+Yrs Index

· Cash RBA Online Saving Account for $10k Index

· Other Rainmaker Average Wholesale Balanced Index

SuperGuard 360 indices are available to be used freely by investors, researchers, financial institutions or media organisations so long as due attribution is given to SuperGuard 360 and Rainmaker Information.

The index remains the property of Rainmaker Information and its group of companies.

/Public Release.