What to invest in

SMSF opens up a whole universe of investment options that is unrivalled in the Superannuation environment. It is natural to wonder what to invest in.

But what is the best investment? In general, SMSF’s invest in the following types of investment and ways to invest on a regular basis:

What to invest in: Australian Listed Securities

Australian listed securities are any companies or trusts that are on the Australian Stock Exchange (ASX).

If you want to know whether a share or stock is listed on the ASX, you can go to the ASX website and search for their company name.  Shares typically will pay dividends or distributions.


What to invest in: Term Deposits

Term deposit products are supplied by banks and building societies in Australia.  Most Term Deposit products are covered by the Australian government capital guarantee, but conditions do apply. It is always wise to read the PDS before commencing.  Term Deposits pay a percentage interest rate depending on the term and amount invested.

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What to invest in: Cash Deposits

Your transaction account will hold and distribute cash according to SMSF needs.  Cash deposits pay interest on amounts deposited.

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What to invest in: Managed Funds

Managed Funds are a combination of listed securities that have been put together by a professional fund manager to produce a financial product for the end consumer.  Managed funds provide a way for investors to gain exposure to a large range of companies and the income that they produce. These investments are ideal for people who want to outsource their ongoing investment decisions.

What to invest in: Real Property

Real Property, either residential or commercial is available in SMSF. There is also an opportunity for small business owners to buy their business premises even if they are renting it. It is even possible to borrow money to invest in property using your SMSF.  There are some rules for Real Property that you must be aware of, so please make sure you read further before deciding to enter into the property market and where to invest with your SMSF.

What to invest in: Fixed Income Securities

Institutions such as governments and corporations borrow from investors by issuing fixed income securities (bonds). These securities obligate the issuer to make periodic ‘coupon’ payments (usually twice a year) to investors as compensation for lending their funds to the issuer. These periodic payments are made until the ‘maturity’ date at which point, the principal amount of the security becomes due and is repaid to the investor. While fixed income securities are traditionally viewed as being less risky than shares or listed property, they are not risk-free.

What to invest in: International Listed Securities

Listed shares listed on overseas stock markets can be part of your SMSF portfolio. International shares can expose the investor to market conditions more favourable than the Australian market or economy.  They can be used to suit a particular investment strategy, where the risks are well known.

What to invest in: Collectables and Unlisted Shares

Artwork, wine & whiskey collections, coins, rare notes and unlisted shares can all be owned in an SMSF.  There are strict rules concerning their ownership which will increase the cost to your SMSF, so please find out more before purchasing these assets.  Unlisted shares also give you an opportunity to invest in companies not yet on the ASX.

What to invest in: Insurance

Insurance is one of the best types of investment to reduce the risk to your SMSF from a member becoming unable to work or deceased.  Insurance premiums are paid by your SMSF and can be claimed as a deduction as an expense to your SMSF.

Supervision SMSF allows you to own any type of legal SMSF asset that you like. Simply choose the service package that suits your immediate needs and get started. If your needs change you can change the service package.

To see what is available in each service package please click here for a comparison that shows you where to invest in Australia.

What you can’t do?

SMSF’s are really flexible, but when deciding what to invest in, there are some ways to invest which are not flexible, please read on for more details.

Types of investments you can’t have: Buy assets and use them as personal assets

The law concerning the use of personal assets in SMSF has been tightened to ensure that these types of investment are not being used by the members of the SMSF to gain a benefit.  This means any assets that could possibly be used by the members are fully insured and stored appropriately.  This is to stop people from buying assets that can be used, destroyed or diminished and or enjoyed by the members today.

Types of investments you can’t have: Lend money to your family or other related party from your SMSF

Your SMSF cannot lend money to your family or related party of the SMSF regardless of the circumstances.  Penalties are serious for this breach and can lead to sizable fines.

Types of investments you can’t have: Buy a property with your SMSF and live in it

Regardless of the investment opportunity that a residential property may offer to you, your SMSF cannot buy a property for you or your relatives to live in.  It doesn’t matter if you live in that residence for one day, it is against superannuation law to do so. This means holiday homes purchased by your SMSF cannot be used by you or your family even periodically.

Types of investments you can’t have: Take money from your SMSF before you are eligible

Just because you have control over your SMSF bank account does not mean that you are able to withdraw money before your time.  The illegal release of money from SMSF is the most serious breach of Superannuation law and can be punishable by imprisonment. Anyone promoting release should be reported to the authorities.

Talk with an SMSF Expert

Supervision is here to help you to work out if a package is right for you, please call to discuss today.