Other asset classes you can choose to invest in range from trusts and other managed investments to debt securities. There
are even some less common (and somewhat obscure options) such as collectibles (like jewellery and artwork) that are
tightly regulated and not widely used.
The sole purpose of your SMSF is to provide you with an enjoyable retirement – so whatever investments you choose, ensure
your decisions are based on what you think will deliver a good return. When choosing, it is imperative you consider
strict ATO super laws; you must keep these investments separate from your business and personal investments.
Once you decide what assets you want, you need to decide your asset allocation. This involves deciding what percentage of
your super is invested in which assets. A thorough
investment strategy will help you to determine the best combinations. Asset allocation is a balancing act of
risk and reward.
What assets should I invest in?
Your investment strategy should be well thought out and take your personal circumstances into account. When deciding asset
allocation, we suggest you carefully factor in your age, patience and the level of risk you are willing to take.
If you are prepared to take more risks to produce profit, investing in bigger payout assets like shares and property can
be a good option. This might be suitable if your members are older and want to increase a small balance quickly.
Alternatively, if your Fund’s members would rather maintain steady and consistent growth, low-risk, low-return options,
such as cash and fixed-interest securities, may be more suitable (large funds can afford to be more conservative).
Regardless of size, age or circumstances, most super funds continue to favour a combination of Australian and international
shares, cash and investment property. Diversification of assets is a common strategy, as the value of assets can
change overnight. Don’t put all your eggs in the proverbial basket.
With careful planning and smart decision-making, an SMSF will allow you and your fellow members to take advantage of the
most appropriate investment classes.
If you want to learn more about SMSFs, download an