What are my SMSF investment options?

One of the reasons SMSFs are so popular is the breadth of investment options open to clients subject only to ATO restrictions which focus mainly on related party conflicts. The key things that the super rules (SIS Act) restrict are investments between related parties of the fund along with limiting the funds’ ability to borrow money. The trust deed and governing rules of the fund can also further restrict what an SMSF can invest in but that is to the option of the members and can be fixed with a replacement deed if required.

What investments can an SMSF invest in?

An SMSF can invest in mainstream assets such as cash, property, listed equities (including Australian and International shares, exchange-traded funds (ETFs), exchange-traded options (ETO), managed funds and real estate investment trusts (REITs)), and unlisted equities (managed funds, private companies and private unit trusts). Other, less common, assets can also form part of an SMSF portfolio, including collectables (artwork, stamps and wine), cryptocurrencies, derivatives, precious metals (gold and silver bullion), and loose pink diamonds.

What assets are SMSFs investing in?

According to the latest statistics released by the Australian Taxation Office (ATO) for the December 2025 quarter, SMSFs have estimated assets (before borrowings and other liabilities) of over $1.06 trillion.

SMSF investors allocated the following to total fund assets:

Investment	Estimated $	Estimated % of total fund assets
Australian listed equities – shares, listed trusts, ETFs	351,664	33.13%
Direct property investments -residential, commercial and LRBA (mostly property)	255,446	24.07%
Unlisted trusts – managed funds, other managed investments and private unit trusts	196,546	18.52%
Cash and term deposits	166,089	15.65%
Other assets	27,127	2.56%
Overseas assets – shares, non-residential property, managed funds	26,975	2.54%
Insurance policies, debt securities & loans	20,042	1.89%
Unlisted shares	13,572	1.28%
Cryptocurrencies	3,252	0.3%
Collectables	725	0.06%
Total	1,061,437	100%

Whilst cryptocurrencies, ETFs and other alternative complex investments are gaining popularity with younger trustees, SMSFs are still very much invested in listed equities, direct property, managed funds and cash.

What are some of the SMSF investment restrictions?

The overarching premise is that any investment must be for the sole purpose of providing retirement benefits to an SMSF member or their beneficiaries if a member dies. The ATO is concerned that an SMSF member may obtain a current-day benefit to which they are not entitled.

The most significant restriction on SMSF investments concerns related-party transactions.

• Property and other assets cannot be acquired from a related party, except in limited circumstances, such as when the asset is business real property or listed securities.
• An SMSF is prohibited from acquiring or holding an in-house asset except where the asset is the member’s business premises leased from the fund, listed equities, an ungeared unit trust or company, or a widely held trust. A fund can acquire or hold in-house assets provided they do not exceed the 5% in-house asset threshold.
• An SMSF trustee cannot lend to, or provide financial assistance to, members or members’ relatives– they can lend to a related party trust or company, provided the loan does not exceed the 5% in-house asset threshold.

Other SIS restrictions limit how a fund can borrow money and restrict risky investments involving margin loans, which require a charge over fund assets. Limited recourse borrowing arrangements

(LRBAs) allow an SMSF to borrow money to acquire business premises or other commercial or residential premises (which can’t be leased to a related party).

Collectables, such as artwork, antiques, coins and stamps, can be included in a fund’s portfolio, but there are strict rules about how the assets are held and secured.

All investment transactions must be made on an arm’s length basis. Excessive income from transactions where the parties are not dealing at arm’s length, typically related-party transactions that are heavily scrutinised by SMSF auditors, may be subject to the non-arm’s-length income (NALI) tax rules. Non-arm’s-length expenses (NALE) have expanded the NALI rules to include expenses that are not at arm’s length and are less than expected, such as paying nil interest on a related-party LRBA. NALI is taxed at 45% (and can include capital gains when the asset is sold).