A self managed super fund (SMSF) gives you more control over what you can invest in
One of the key differences between having a retail Superannuation Fund versus a Self Managed Super Fund (SMSF) is that a SMSF provides you with more control in what and where to invest your dollars. In a standard Superannuation Fund, the control over investment decisions lies ultimately with the Fund Trustees.
So, what can you invest in with a SMSF?
The short answer is almost anything you yourself could invest in as an individual. This includes:
- Direct investments (such as shares, ETFs, cash, term deposits, hybrids, income securities, gold/silver bullion and bonds)
- Cryptocurrencies, Bitcoin, Ethereum, initial Coin Offerrings (Just because you can doesn’t mean you should)
- Direct property (Residential houses, villas, units, as well as Commercial property such as offices, warehouses, factory units, shops and land.)
- Managed funds (retail or wholesale, domestic and/or international)
- Private Unit Trusts
- A business (non-related party to avoid hassle) and business property
- Non-traditional assets such as coins, antiques, art , taxi plate licences, ATMs (some of these have been subject to major losses)
So how do I go about investing in these things through my SMSF portfolio?
Firstly, you need to make sure your Trust Deed permits you to invest in the items you’re considering. If your Trust Deed doesn’t include certain investments (eg. like cyptocurrencies), then you need to have the Trust Deed updated to allow them.
The next step is to assess the fund’s investment strategy, as this will outline the types of investments the SMSF actually holds. The investment strategy should reflect your objectives, risk profile/tolerance, liquidity needs and the investments you intend to utilise. It’s important to note also that the fund’s investment strategy can be changed as often as you wish, to suit changing circumstances and to allow new investment opportunities.