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About Self Managed Super Funds

A Self Managed Super Fund (SMSF):

  • Has less than 5 members
  • Each individual trustee of the fund is a fund member
  • Each member of the fund is a trustee
  • No member of the fund is an employee of another member of the fund, unless those members are related
  • The trustee can be a corporate entity
  • No trustee of the fund receives remuneration for his or her services as a trustee
  • A SMSF is registered with, reports to and is regulated by the Australian Taxation Office

Setting up an investment strategy

The trustees of an SMSF are required to prepare and implement an investment strategy for the superannuation fund. The strategy must reflect the purpose and circumstances of the fund and take into account:

  • How to maximise member returns while having regard to the risk
  • Appropriate diversification in a long term investment strategy; and
  • The ability of the fund to pay benefits as members reach retirement, and other costs incurred by the superannuation fund.

Trustees must make sure all investment decisions are made in accordance with the documented investment strategy of the fund and should seek investment advice or appoint an investment manager in writing if in any doubt.

Using ASX listed products in SMSFs

The use of ASX products in SMSFs is popular as they can provide a cost effective way to gain exposure to a number of different asset classes. ASX products benefit from liquidity and settlement certainty that trading on an exchange delivers.

The following table of ASX products showcases the asset classes you can potentially get exposure to along with a brief description of the product.

ASX Product Asset Class Description
Shares Domestic Equity People invest in shares to achieve financial goals - either through share price growth or via income paid as dividends. Shares are easy to buy and sell and can help you diversify your portfolio.
Interest Rate Securities Cash/Fixed Interest Interest rate investments can provide investors with a regular income stream, diversification and portfolio stabilisation.
ETPs

Domestic Equity
International  Equity Listed Property
Cash
Fixed Income
Commodity

ETP  (Exchange Traded Products) which is the family name for a suite of products inlcuding Exchange Traded Funds (ETFs) provide investors with the ability to establish a diversified portfolio easily and cost effectively through a single security.
Managed Funds Cash/Fixed Interest
Domestic Equity
International Equity
Property
Commodity
Listed managed funds hold and manage a portfolio of assets on behalf of their investors and can include a variety of assets.
REITS Property  REITs allow investors to purchase an interest in a diversified and professionally managed portfolio of real estate in the same way as you would purchase shares in a company or a unit in a managed fund. The real estate portfolio can include commercial, industrial, retail or a mix of real estate assets. 
Infrastructure Funds Property  Infrastructure funds invest in public infrastructure assets. These assets are the essential goods and services of our economy utilised by companies and individuals during their ordinary activities. Examples include toll roads, airports, oil/gas pipelines and broadcasting towers.
Investment Warrants Domestic Equity
International Equity
Property
Investment Warrants give the investor the opportunity to enter the market at a lower cost, with less capital, and yet still derive some of the benefits including all the dividends, franking credits and potential capital growth associated with the shares themselves.
Trading Warrants * Cash/Fixed Interest
Domestic Equity
International Equity
Property
Commodity
Can be used to manage risk on an investment portfolio.
Futures & Options * Cash/Fixed Interest
Domestic Equity
Property
Commodity
Can be used to manage risk on an investment portfolio.
ASX Listed CFDs * Domestic Equity
International Equity
Property
Commodity
Currency
Can be used to manage risk on an investment portfolio.

* ASX products denoted with an asterisk may carry additional risks and require further advice as to their use within an SMSF.

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