What types of investments can a SMSF make?
All investments must meet the sole purposes test. SMSFs can invest in traditional assets such as shares, property, bonds and cash as well as more complex financial instruments such as options and certain kinds of warrants. While superannuation law doesn’t stipulate what an SMSF can and can’t invest in, there are restrictions on the entities a fund can invest in and acquire assets from. For example, SMSF’s cannot: • acquire assets from a related party • allow in-house assets (such as a loan, investment or lease of a fund asset to a related party) to exceed five per cent of total assets • borrow money except in limited circumstances It is best to seek professional advice if you are considering investing in more complex or non-traditional investments.
