What Are The Investment Options In Self Managed Super Fund

What Are The Investment Options In SMSF

According to the Australian taxation law, as an SMSF trustee, you can control your superannuation investments. But to make the most out of those self managed superannuation fund investments, it is crucial to set goals and choose the appropriate and productive investment options. You should also have a proper investment strategy in place and review it at least once a year to comply with the legal requirements.

Check out the following article as we discuss about the investment options and other significant factors.

What Are Your Investment Options?

In Australia, there is a wide range of asset categories where you can make your SMSF investments. These classes are:

  • International and Australian shares (unlisted and listed)
  • Commercial or residential property
  • Fixed income products
  • Term and cash deposits
  • Physical commodities
  • Collectables
  • Property

What Can Be The Best Investments For Your SMSF?

Which investments can be better for you will depend on your financial goals and age.

  • If your age falls in the range of 30-40, you may invest in any residential project. This type of investment can bring you considerable capital gains over a term of 20 to 30 years. However, there is one minor drawback and that the income is comparatively low relative to other options.
  • Once your age becomes 60, the SMSF turns into a tax-free entity. Thus, you can get a much more significant net gain by selling this property. After that, you may direct the amount to more income-focused investments that will benefit you after retirement.
  • People nearing their retirements need to depend more on income, and thus it will be better to make investments that can help them receive a high and reliable annual income. Fully-franked blue clip shares can be an option to get the refunded franking credits at the time of lodging tax return. Another fruitful option may be bank hybrid security investment. In a bank hybrid investment, you will be paid a fixed-interest amount.

What Are The Three Steps To SMSF Investing?

Even though financial goals vary from person to person, these are the three factors one must consider for SMSF investment.

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  • Capital growth: building wealth

Capital growth refers to the increase in an investment market value over a certain period. So, if you are eyeing long-term investments, you have to consider this area. It will also be beneficial if you plan to turn your life savings into assets for your children.

Unlike defensive assets such as cash, growth assets can get you higher returns. However, there may be a chance of potential capital loss and higher volatility, and you should be prepared for that.

  • Income generation: earning regular payments

When you invest in generating income, it will involve assets that provide regular payments or stable income. Regular payment options include dividends or interest. And if you want to fund lifestyle expenses with investment and super returns, generating income will be highly essential. Income assets do not offer much growth, but they will ensure a steady cash flow.

  • Capital preservation: managing risk

For several investors, protecting hard-earned savings is the main objective, and therefore they go for lower-risk investments like term deposits or bonds, which bring relatively lower returns. Retired persons mainly depend on their SMSFs to cover living costs, and for them, capital preservation can be highly essential.

For specific queries, you can ask any leading SMSF consultants.

What Are The Benefits Of An SMSF?

For an SMSF, you will generally need to have a flat fee structure. So, you can set up your SMSF only when you have a substantial amount in your super fund. The starting fee for a simple SMSF is $1800, with an additional GST amount. As it becomes more complex, the fees can become as high as $4500, with GST applicable. An annual ATO Levy of $259 must be paid for the SMSF, along with the regular costs for an independent audit. Thus, if your super fund balance is lower, you may run into problems.

Well, it may seem a little worrying, but the benefits it offers can compensate for all the money you invest. The benefits include:

  • Better control over investment: It means you can decide how, when, and where you will invest.
  • More options for investments: Properties, residential projects, collectables, shares, etc., are some of the choices you can invest in.
  • Better clarity over the investments
  • Better control over tax: You can structure your investment to reduce your taxes effectively.
  • Easy and quick access to money at the time of retirement
  • More control over estate planning

In an SMSF, you can have more control over investment-related matters. But, a little professional SMSF advice will always help you to step forward. So, whenever you plan to invest in your SMSF, you should consult your adviser.


Any business entity must remain legally compliant, and an SMSF audit is a mandatory task that every trustee must oversee. An adequately audited logbook will keep your fund compliant with the ATO obligations. Any top SMSF auditor can help you with it and make sure you only associate with the best experts.

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