Best SMSF investments

Best SMSF investments

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Yes! A self-managed super fund is one step ahead of other superannuation for its investment flexibility. You will enjoy more control.

The significant advantage is you can quickly purchase and sell assets. Also, you can change the asset allocation based on your portfolio.

But for a successful investment, you should determine your target and imply a proper strategy. Typically, it depends on your long and short-term goals, lifestyle, and market conditions.

Therefore, we will explain the best investment for your SMSF. Let’s get started:

Exploring the potential investment options:

With your self-managed super, you can control the investment portfolio. The exciting part is you are getting several investment opportunities to explore:

  • International and Australian Shares
  • Commercial and residential properties
  • Cash deposit
  • Property
  • Commodities

Invest in shares:

A self-managed fund can invest in exchange trade shares, any individual company share, listed or unlisted share-based fund.

According to research, up to 30 % of SMSF assets invest in listed shares. On the other hand, up to 15% of SMSF assets invest in unlisted shares. SMSF also attracts the stock that can provide high-franked dividends.

Moreover, a few amounts of assets directly invest in global shares.

Property investment:

Your self-managed superannuation provides a massive opportunity to invest in properties (both commercial and residential).

The significant advantage is your fund can utilize the limited recourse borrowing arrangement.

However, in residential property, any member of SMSF or related parties cannot rent or live.

On the other hand, SMSF can lease commercial properties to its trustees for business purposes.

Another excellent opportunity is investing in the Real Estate trust.

Invest in cash:

Near about 20 % of SMSF assets invest in cash or term deposits. Moreover, bonds minimize the rate of validity and provide better returns.

Unique investment:

A self-managed fund can invest in jewellery, arts and crafts, coins, antiques, boats, or classic cars. Even investing in precious metals is also an excellent idea.

Furthermore, your SMSF can invest in private companies.

Advanced investment options:

The significant benefit of an SMSF is its broader range of investment options. Yes! You have options to choose any Australian or overseas shares, commercial and residential properties, cash deposits, and physical commodities.

But these areas are only for a steady income flow.

Apart from these traditional investment options, diversify your portfolio for advanced investment strategies. It will help you to manage the risk and get more profit.

Moreover, this process will help sustain your income stream. Therefore, besides the traditional investments, you have the following options:

Corporate bonds:

provide a much better outcome than cash

Commercial real estate:

Offers higher yield and predictable cash flow compared to rents or residential properties


Ensures a long-term and predictable income stream

Steps and categories of SMSF investment:

We can classify the SMSF investment into the following three categories:

Building wealth:

This area is recommendable if you prefer a massive return and are ready for long-term investment. Typically, it is known as growth assets that provide a higher return than any defensive asset.

But you must be aware of the risk factors.

Income assets:

Typically, an income asset has little growth. This area is suitable to fund your lifestyle expense or regular payments.

Capital preservation:

This area does not provide any good returns. But if you want to avoid risk factors and protect your savings, this area is right for you.

Key Takeaways:

What is the best investment for my self-managed super fund?

The investment strategy typically clarifies based on the financial goals. Age is also a significant factor.

If you are 30 to 40, it is recommendable to invest in residential properties (based on the expert’s guidelines).

You may get a massive level of capital gains between 20 to 30 years. That means you can prepare for long-term investment.

On the other hand, after 60, your fund will be a tax-free entity. In this case, selling the property will provide a massive net gain.

But after retirement, you should choose a more reliable income stream. Overall, a better investment comes from your objectives.

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