Deposit guarantee drives DIY investors

The government guarantee on deposits and do it yourself attitude are driving renewed interest in self managed super. Good investment returns by big super funds in April still see them lagging well behind many self managed funds in the investment return stakes.

In 2008, more than 32,000 new self managed superannuation funds were established says the tax office. Close to 800,000 Australians now do it themselves when it comes to super.

“New registrations of self-managed funds have been growing strongly, and spiking since September,” said the tax commissioner Michael D'Ascenzo in March.

“The APRA research for return on investment within the superannuation fund industry in December 2007 hypothesised that SMSFs outperformed the other four superannuation sectors in seven out of nine financial years,” says Andrea Slattery, chief executive of the SMSF Professionals Association of Australia. “In those seven years this outperformance ranged from 0 to 6.5 per cent.”

The Australian Prudential Regulatory Authority (APRA) found that funds with less than five members outperformed the big funds in seven of the nine years between 1997 and 2005.

Source: Herald Sun