Need to Know

SMSF Investment Strategy

Self Managed Superannuation Funds (SMSFs) are legally required to have a written investment strategy. The trustees of the fund are required to formulate the investment strategy having regard to a number of factors including liabilities, risk and return, diversification and liquidity. SMSF trustees must also consider if their members should have life insurance.

There are a few key considerations when implementing the investment strategy. The fund must be able to pay administrative expenses, and taxes when they fall due. The diversification of investments is also crucial, SMSFs have very few limits on what they can invest in, so long as it is in the investment strategy and complies with other laws. The risk and return of the investments need to be considered so that member’s benefits can be maximised. It is also important to consider that when members reach the retirement age, the investments will have to produce an income stream after their retirement.

"The risk and return of the investments need to be considered so that member’s benefits can be maximised.”

Investment strategies for SMSFs can vary in complexity. The investment strategy should be reviewed annually at a minimum, as well as when important events occur, such as when new members are added or existing members reach retirement age. The investment strategy need not be changed every year or at every review, but it is important to examine how the investment strategy has performed in the past. Throughout all of the steps to implementing and reviewing the investment strategy, one of the most important points to remember that the investments have to match up to the strategy. If considering investing in new areas then it is important to amend the strategy to allow these new investments and to avoid the penalties for breaching the investment strategy.

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The SMSF Association has just released the “Intimate with Self-Managed Superannuation” Report giving important insights into Australian SMSF. This report highlights opportunities for future growth. Read More...

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There are a few key considerations when implementing an SMSF investment strategy. Read More...

We’ve selected and brought together some of the most experienced experts in the country to guide our decisions and keep our business at the forefront of this industry. Read More...

Plain language is important both in Acts of Parliament and in private legal documents. People to whom they apply should not be put off from reading them by complex language. Read More...

A Self managed superannuation fund (“SMSF”) is regulated by the Superannuation Industry (Supervision) Act 1993 (Cth) (“SIS Act”). Read More...

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