Setting an SMSF investment strategy Setting an SMSF investment strategy Setting an SMSF investment strategy

Setting an SMSF investment strategy


Saxo Markets

Summary:  An investment strategy for your self-managed superannuation fund (SMSF) is not only prudent in practice but required under Australian superannuation law.

The strategy should outline the SMSF’s plan for making, holding and realising assets consistent with overarching investment objectives. In other words, the plan should explain how SMSF trustees will invest the money in the fund – and why this approach has been taken.

The investment strategy may take into account:

  • The age of SMSF members;
  • The employment status of SMSF members;
  • Members’ specific retirement needs.

It should also consider:

  • The likely investment returns following from the strategy, and any associated risks;
  • The composition of the fund, and its approach to investment diversification;
  • The liquidity of the SMSF’s assets;
  • Insurance-related expenses for each SMSF member.

As noted by the Australian Taxation Office, the asset allocation within the SMSF “should support and reflect your articulated investment approach towards achieving your retirement goals”. Investment decisions must also align with the SMSF’s trust deed, and meet the “sole purpose test” of existing solely to provide retirement benefits to members.

Superannuation law also requires that the SMSF trustee regularly reviews (at least annually) the fund’s investment strategy, ensuring it remains fit for purpose and corresponds with the fund’s specified retirement goals. Reviews may be required when market conditions change, members join or depart the fund, or members begin to receive a pension.

Each year, the SMSF’s auditor will also consider whether the fund’s investment strategy meets the minimum requirements under superannuation law.


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