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When you are considering doing self-managed super fund, you need to make sure that you are getting as much information as possible about it. And, this normally includes the SMSF investment strategy. This is the only way that you can be sure to get as much information as possible to ensure that your SMSF is going to be successful. These are some things that you should know about the SMSF investment strategy.

SMSF investment strategy is a requirement

Something really important that you need to know is that you need to have aninvestment strategy for your self-managed superannuation fund. This is something that you need to have, and you need to add it every year with your audits each year.

The moment that you don’t have an investment strategy, then you have the change to fail with your SMSF and that you might be operating this investment illegally.

Investing in different aspects

The first thing that you need to have in your investment strategy is the different options that you are going to invest in. The more investing you have, the better your self-managed super fund is going to be. And, this is something that is required in your strategy document.

If you don’t have this in your strategy, you might encounter problems later on. You need to show what you are planning to invest in, and you need to show that you are considering every aspect of growing your SMSF.

Personal circumstances should be included

Another thing that you need to add to the SMSF investment strategy, is the personal circumstances of everyone involved with the self-managed superannuation fund.  It is important to give all the personal details of all the members in the strategy document.

This will include the age of the person, the full names and surnames and their addresses. Everything that is important to the SMSF. The more information you add about the personal circumstances of each member, the more complete your strategy document will be. Learn more.

It should be reviewed regularly

The last tip about your self-managed super fund is that you should review your investment strategy on a regular basis. This is important that you are adjusting your SMSF investment strategy as things are changing. Things like personal information, investment options and any other change that might have an influence on your SMSF.

It is recommended that you are reviewing your SMSF every year when it is time for doing audits. Then you will know that no matter what, your investment strategy is up to date.

When you are doing your SMSF, the one thing that you need to know is that you need to have an investment strategy and that you should include it with your audits. You can get into trouble if you don’t have your strategy included and if you have changes that you didn’t add to your SMSF. Many people forget about their self-managed super fund investment strategy, and then they need to add it before their audits can be approved, and this can cause other problems as well. For more details, visit:


So your SMSF Administrator/Accountant now has to use an Independent Auditor,and suddenly you are being asked for more than just the 1 page SMSF Investment Strategy template provided by the Accountant that you used to sign without filling in the blanks and without considering its purpose.

Here are six important considerations in establishing your SMSF investment strategy.

Liquidity Needs: What life stage are each of the members in?

The members’ circumstances and life-stage will have the most important impact on your SMSF investment strategy.  If you are all 20 years out from retirement, you may choose to invest for growth and ride with the volatility of the share and property markets to benefit from the risk/return premium attributed to those sectors which are less liquid than cash and bonds.

What’s the members’ risk tolerance?

The ability of all involved to sleep comfortably at night without worrying about their investments should always be taken into consideration regardless of your age. If you or another member have no experience or confidence in certain market sectors, then short-term your investment strategy should be tailored accordingly. But you should then seek more information, education,and guidance to build your knowledge and then your confidence in those missing sectors so that you can adopt a well-diversified strategy long-term.

Asset allocation

Investing in the right asset classes is a major factor in the returns you will receive. Aussie Equities and Cash are not a full solution long-term. Cash and TD rates are currently low,and our share market had a poor year last year,and our economy is struggling while international equities, property,and infrastructure are benefiting from improving economies, low interest rates,and the dropping Aussie dollar. Your asset allocation should be reviewed annually and rebalanced to account for the returns from various asset classes and their future forecast.

Avoid sector bias

The Big 4 Banks, Woolworths and Telstra do not make a diversified portfolio! Once you have decided which asset classes to invest in, it is important to diversify within those asset classes. Frequently I see investment portfolios with a narrow range of large Australian companies just like mentioned above providing very poor diversification – and leaving the overall investment portfolio heavily reliant on the fortunes of one or two sectors.

Tax efficiency

Often the spur to look at complex and structured investments near June 30th is the tax consideration. The amount of tax you pay on investment has a major impact on your SMSF investment strategy.  Here are the tax basics for SMSFs:For example, if you were lucky enough to have bought 1000 CBA shares during the GFC at $30 and sell them now at $90 in accumulation phase you will pay $6,000 in tax with a net profit of $54,000. While if you were lucky to move in to pension phase, you receive the full $60,000 tax-free.

Insurance Needs of the Members

Trustees of SMSFs now have to consider, as part of its Investment strategy “whether the trustees of the fund should hold a contract of insurance that provides insurance cover for one or more members of the fund.”This is a significant addition to the previous provisions and has been prompted by the Super System Review panel noting that less than 13% of SMSFs have insurance.


You can seek professional advice to help with your SMSF investment strategy but remember: as trustee, you are still ultimately responsible for your fund’s investment decisions so next time you sign off a template provided by your administrator remember it is you that is responsible not them.