The SMSF structure provides more investment options than other super funds by giving members the option to buy shares, deposit in high-yielding accounts, and much more. An Australian SMSF can invest in the following asset classes:
The SMSF structure allows members to adjust the investment portfolio in line with current market conditions, new rules for super funds and changing personal circumstances. It also provides a tax saving, as concessional tax rates apply to SMSF’s. Tax on investment income is capped at 15 per cent during the accumulation phase and no tax is payable when members officially retire or when one of the conditions of release is met. Effective tax strategies can assist trustees to benefit from these tax concessions.
Contributions and rollovers of members can be paid into an SMSF, thereby combining super assets, but restrictions are in place regarding the member’s age and contribution caps. The resulting larger balance opens more opportunities in terms of investments.
A supervisory levy is payable with each SMSF annual return, but levies are capped regardless of the balance in the Fund, making it more cost-effective as the Fund grows. Members have control over the total cost of running an SMSF by choosing to engage professional support or managing related investment costs.
SMSF investors are inclined to be diverse, flexible and open to expert advice about new trends in the investment environment. They are often ahead of the rest of the market in terms of investment trends because they are very involved and are always looking for opportunities to increase their wealth through a diverse range of investment vehicles, both locally and overseas.
While financial advice should always be sought, short-term property secured investments do offer very competitive returns and are an excellent option for building diversified investments inside an SMSF. Yields are often higher than traditional investment channels with the added benefit of property as security to help manage risk.