When size matters: A closer look at SMSF performance

In this report we use a comprehensive dataset to have a closer look at SMSF (self-managed superannuation fund) performance. Using longitudinal data from 20,121 unique SMSFs starting from the 2008-2009 fiscal year until 2014-2015, we examine fund characteristics that contribute to large SMSFs outperforming the smaller ones. These characteristics include the diversification of SMSFs by asset class, expense of operating SMSFs and the relationship that fund size has with how old the SMSF is. We find that large SMSFs perform better than the smaller ones. We also find large SMSFs are more diversified, have lower expense ratios and have been in existence for longer than the smaller SMSFs. Our findings indicate that having a more diversified portfolio, operating more efficiently and having operated for longer contribute to the superior performance of large SMSFs.

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