SMSFs have outperformed APRA‑regulated funds over the 5‑year period to June 2024
The SMSF Association reports:
- “SMSFs delivered a five‑year rate of return that was 1.1 percentage points higher than APRA‑regulated funds.” [smsfassociation.com]
This is based on geometric mean returns across five years.
Conclusion:
➡️ Over long‑term periods (5 years), SMSFs outperformed industry and retail funds.
📌 2. FY2025 Performance – Industry/Retail Funds vs SMSFs
A 2026 performance analysis summarised FY2025 returns:
Industry & Retail Fund Returns After Fees (FY2025)
| Fund Type | Net Return (After Fees) |
|---|---|
| Industry Fund (Balanced/Growth) | 8.2% – 9.3% |
| Retail Fund (Balanced/Growth) | 7.2% – 8.6% |
Industry funds outperform retail funds mainly due to lower fee drag.
📌 3. SMSF Performance – FY2025
The same FY2025 performance study identifies that SMSFs perform very differently depending on asset allocation:
SMSF performance by key asset classes (summarised from analysis):
- Australian shares: Strong positive performance in FY2025
- International shares: Strong contributor (similar to APRA funds)
- Property (direct commercial & residential): Mixed depending on gearing & location
- Bitcoin and gold: Many SMSFs with crypto exposure significantly outperformed balanced funds
- SMSFs often have lower cash allocations than industry funds → boosts returns in positive markets
SMSF average performance is not quoted as a single figure, because returns are highly individualised, but the study notes many SMSFs outperformed the standard balanced fund benchmarks.
📌 4. APRA Data – Industry Funds Continue to Dominate in Net Inflows
APRA data to March 2025 shows:
- Industry funds had rolling 12‑month returns of ~5.1%
- Retail funds averaged ~4.7%
However:
- Net transfers: $4.8 billion flowed out of industry funds into SMSFs over 12 months
(major trend in 2024–2025).
📌 5. Balance Size and Performance – Who Wins?
Important: Performance varies significantly depending on SMSF size.
A 2026 evidence‑based analysis finds:
When Industry Funds Win
- SMSF balance < $200k–$500k
- Higher SMSF fixed costs (admin + audit) eat returns
- Behavioural mistakes (poor diversification, bad timing decisions) reduce returns by 1–2% p.a.
When SMSFs Win
- SMSF balance > $500k (especially $1m+)
- SMSFs have access to:
- Direct property
- Customised share portfolios
- Tax optimisation strategies
- Lower effective cost ratios at scale
- Long‑term returns for SMSFs exceed APRA funds by ~1.1% p.a. over a 5‑year period
[smsfassociation.com]
📌 6. Cost Comparison – Major Driver of Performance Differences
Typical industry fund fees:
0.8% – 1.3% (balanced option)
Typical SMSF costs:
$3,000–$5,000 total annual fixed costs
This means:
- At $200k balance → 2% cost ratio → industry funds usually win
- At $500k balance → 0.6–1.0% cost ratio → competitive
- At $1m+ balance → 0.3–0.5% cost ratio → SMSFs usually win
📌 7. Key Insights – SMSF vs Industry Fund Performance
Long‑term evidence (2019–2024): SMSFs beat APRA funds by ~1.1% p.a. [smsfassociation.com]
FY2025 short‑term evidence: industry funds averaged 8–9% net returns
SMSF outcomes are highly variable:
- Top‑performing SMSFs (diversified + property + shares) outperform all APRA funds
- Poorly‑diversified SMSFs (e.g., 1–2 shares + high cash) underperform significantly
SMSF performance strongly depends on trustee capability and investment strategy.
📌 8. Summary Table – SMSF vs Industry Fund (2024–2026)
| Category | SMSF | Industry Fund |
|---|---|---|
| 5‑year performance | +1.1% p.a. above APRA funds [smsfassociation.com] | Slightly below SMSFs |
| FY2025 returns | Variable: many >10% depending on mix | 8.2% – 9.3% net [mysmsfprop…rty.com.au] |
| Best for balances | $500k–$1M+ | < $500k |
| Costs | Fixed ($3k–$5k p.a.) | %‑based (0.8–1.3%) |
| Investment flexibility | Very high (property, crypto, direct shares) | Low (pre‑set options) |
| Behavioural risk | Higher (self‑directed errors) | Low (professional management) |
| Tax control | Excellent | Moderate |