The place for alternative investments in SMSF portfolios

The concept of alternative investments encompasses a mix of assets and strategies that sit on the peripheral of traditional asset classes such as shares, property and cash. An attraction associated with alternative investments is their ability to deliver portfolio diversification — and hence potential risk abatement. The place for alternative investments in SMSF portfolios

While the proportion of alternative investments in any given SMSF portfolio will very largely depend on a trustee’s own situation, the fundamental approach to managing alternatives remains the focus on volatility and a trustee’s risk profile.

Being such an individual choice, there are many decisions that an SMSF trustee must make in regard to such investments, not least of which is the proportion of the portfolio that will comprise alternatives. Another important factor is liquidity, with consideration likely needed in regards to the paths available to realise the value of alternative holdings. And any such allocation to alternatives will of course also need to align with the overall objective of the fund.

Free webinar recording
In an exclusive Tax & Super Australia webinar, and in collaboration with top 20 law firm Maddocks, Cleardocs discusses SMSFs and alternative investment strategies. Presented by Julian Smith from Maddocks Lawyers and Cassandra Townsend from Thomson Reuters, the webinar covers:

    • Limited recourse borrowing statistics and conclusions
    • Key borrowing limitations
    • Solutions to these limitations:
      • unit trust solution
      • joint borrowing solution
      • small APRA fund and investments in unrelated trusts

Member discount
Tax & Super Australia members can enjoy a 10% discount on all Cleardocs documents. See here for more details.

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