What can my SMSF Invest in?

We understand that managing your SMSF (Self-Managed Super Fund) can be complicated, especially when it comes to investing. As such, we’ve put together a comprehensive guide to help you understand the wide range of assets in which your SMSF can invest.

1. Cash and Term Deposits 

Firstly, it’s important to note that SMSFs are allowed to invest in a range of assets, provided they comply with superannuation law and the SMSF’s investment strategy. One of these investments include cash and term deposits with Australian financial institutions. These term deposits will give a better return than keeping your money in the bank. Just always make sure that the institutions you go with are repairable. 

2. Listed Securities

It is important to have an investment strategy for your Super. Additionally, SMSFs can invest in shares listed on the Australian Securities Exchange (ASX) and other approved stock exchanges. This is a great way to diversify your investment portfolio and potentially earn higher returns. If you hold a share for 10 – 30 years, things such as compounding interest will help your SMSF grow.

3. Managed Funds

Managed funds are another option for SMSF investments. This includes exchange-traded funds (ETFs) and other types of managed funds. These funds are managed by a professional fund manager, which can help to reduce risk and achieve long-term investment goals.

4. Property

SMSFs can also invest in commercial or residential property, subject to certain restrictions and requirements of course.  This can provide a stable income stream and potential growth. An investment property is a smart financial move. Although it’s important to note that property investment comes with additional responsibilities, such as maintenance and management. Therefore investing in property will be for people who will be hands on. 

5. Alternative Investments

Finally, SMSFs can invest in a range of alternative assets, including private equity, infrastructure, and hedge funds. These investments are typically more complex and carry higher risk, but can also offer higher potential returns.

It’s important to note that SMSFs are subject to strict rules and regulations, and there are restrictions on certain types of investments, such as related-party transactions and collectibles.

It’s recommended that you seek professional advice from a licensed financial advisor or accountant to ensure that your SMSF investments are compliant and appropriate for your financial goals and risk profile.

In conclusion, managing your SMSF investments can be complex, but with the right advice and guidance, it can also be a rewarding and profitable experience. By investing in a range of assets, complying with regulations, and seeking professional advice, you can achieve your long-term financial goals and secure your financial future.

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