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Sovereign Wealth Funds Briefing - Categorized | Financials

Viable SMSF size underestimated

Posted on 08 April 2014

The size at which a self-managed superannuation fund (SMSF) becomes a viable alternative to regular funds may be considerably higher than the industry currently estimates due to the impact of scale on performance. The industry typically advises that a minimum balance of between $100,000 and $200,000 is the tipping point at which SMSFs costs match those of pooled superannuation funds.
However, Rainmaker analysis of Australian Taxation Office (ATO) performance data suggests that there is a significant scale effect associated with fund returns which means the SMSFs don’t receive a material benefit until they have much higher balances………………………………………..Full Article: Source


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