This article is more than 24 months old and is now archived. This article has not been updated to reflect any changes to the law.
clearlaw
Is it time to review your SMSF's investment strategy?
A recent article in the Australian Financial Review reported on the increasing popularity of exchange traded funds (ETFs) as an investment option for SMSFs.
Trustees should be aware that if they intentionally or even accidentally invest in an asset type not permitted under the fund's investment strategy, the trustees will be in contravention of the investment strategy and, likely, the governing rules of the SMSF.
Aside from the legislative requirement, this highlights the importance of regularly reviewing a fund's investment strategy.
Cassandra Townsend, Thomson ReutersIn our earlier ClearLaw article titled "The importance of a comprehensive SMSF investment strategy", our lawyers at Maddocks outlined the SIS Act and Regulations requirements around SMSF investment strategies.
Under the law, a trustee must regularly review the fund's investment strategy. If a fund's investments are not consistent with that strategy, the trustee can:
- dispose of that asset and where appropriate, reinvest those funds in a permitted investment; or
- amend the SMSF's investment strategy to permit them to invest in that particular investment provided that it is in the best interests of the SMSF, and have the SMSF's members approve these arrangements.
You can read about how to vary your fund's investment strategy on our website.
More Cleardocs information on related topics
You can read earlier ClearLaw articles on a range of SMSF topics.
Order SMSF related document packages
- Set up an SMSF investment strategy
- Set up an SMSF pension
- Arrange SMSF borrowing documents:
- Set up an SMSF
- Set up an SMSF corporate trustee
- Update an SMSF deed
Lawyer in Profile
Special Counsel
+61 3 9258 3524
paul.ellis@maddocks.com.au
Qualifications: LLB, Deakin University, BA (Political Science), Monash University
Paul is a Special Counsel in Maddocks Government and Not-for-Profit Commercial team. He specialises in:
- the establishment, governance, operations, regulation and administration of charities and other not-for-profit entities,
- in commercial arrangements for the procurement or supply of goods and services, including technology services, and
- in compliance and enforcement activities undertaken by government agencies.
Paul is Maddocks' main authority in relation to the Personal Property Securities Act 2009.
He has an in-depth understanding of the government sector, as his experience prior to Maddocks includes 13 years with the Victorian Department of Justice.
Read Our Latest Articles
Superannuation
Evidencing Arm's-Length Private Lending - SMSF Defends Against ATO NALI determination
customer support
legal advice
-
The legal information and commentary on this site is general only. Documents ordered through Cleardocs affect the user's legal rights and liabilities. To assess their suitability for the user, legal accounting and financial advice must be obtained.