SMSF investments
SMSF investment options: what you can (and can't) hold
By Tim Roff, Founder & SMSF Specialist · Updated
An SMSF gives you direct control over how your retirement savings are invested — far broader than the menu of an industry or retail fund. You can hold Australian and international shares, ETFs, direct property, cash, term deposits and even cryptocurrency. But every asset must satisfy the sole purpose test, sit inside your fund's written Investment Strategy, and respect the related-party rules in the SIS Act. Here's the full picture.
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How SMSF investing works
Your SMSF is its own legal entity. The trustees (you and your members, or your corporate trustee) make every investment decision and execute trades in the fund's name. Cash sits in a fund-titled bank account; shares are held via a broker account in the fund's name; property is registered to the trustee 'as trustee for' the fund.
easySMSF opens your SMSF trading account with Interactive Brokers (IBKR), giving access to 150+ markets across 33 countries — global shares, ETFs, bonds, options and futures from a single SMSF-compliant account. For property, your fund can buy outright or use a Limited Recourse Borrowing Arrangement (LRBA) through a bare trust.
The rules that matter most: the sole purpose test (no current-day use of fund assets), the related-party prohibition (s66 — generally can't buy from yourself or family), and the in-house asset cap (5% of fund value for any loan to or investment with a related party). Breach these and the ATO can tax the entire fund at 45%.
- Direct ASX and international shares via Interactive Brokers (IBKR)
- ETFs, managed funds, bonds, options and futures
- Residential and commercial (business real property) direct property
- Term deposits and high-interest cash accounts
- Gold, silver and other physical bullion
- Cryptocurrency via SMSF-compliant exchanges
- Limited Recourse Borrowing Arrangements (LRBAs) for property
Frequently asked questions
Free download
SMSF Investment Options Checklist (PDF)
A one-page trustee reference covering allowed assets, the sole purpose test, related-party rules, Investment Strategy requirements and the breaches that catch trustees out.
SMSF asset comparison
What's allowed, what the rules are, and where trustees most commonly trip up.
| Asset class | Allowed? | Rules & notes | Watch-outs |
|---|---|---|---|
| Australian & international shares / ETFs | Yes | Via IBKR SMSF account — 150+ markets. Direct ASX, US, UK, EU, Asian listings. | Market volatility, FX exposure for offshore holdings. |
| Residential property | Yes | Cannot be lived in or rented by members or related parties. Purchase from third parties only. | Illiquidity, concentration, LRBA loan compliance if borrowed. |
| Business real property | Yes | Commercial premises used wholly in a business. Can be acquired from related party at market value and leased back at arm's-length rent. | Valuation rigour at each acquisition and lease review. |
| Cash & term deposits | Yes | Held in the fund's own bank account, titled 'as trustee for'. Required for pension drawdowns and liquidity. | Inflation erosion if over-weighted. |
| Cryptocurrency | Yes | Wallet/exchange account in trustee name. Must be SMSF-compliant exchange. Valued at 30 June. | Extreme volatility — concentration must align with Investment Strategy. |
| Collectables (art, wine, classic cars) | Conditional | Permitted but cannot be used, displayed, or stored at a related party's premises. Insured in fund name within 7 days. | Strict storage, insurance and use rules — easy breach territory. |
| Loans to members or relatives | No (s65) | Strict-liability breach — never permitted under any circumstances. | Administrative penalty + potential non-complying status. |
| In-house assets (>5%) | Capped | Loans to / investments in / leases with related parties are capped at 5% of fund value (s71). | Excess must be disposed of by end of following year. |
The three rules every trustee must know
s62 SIS Act
Sole purpose test
Every asset must be held to provide retirement (or death) benefits — no current-day use, enjoyment or benefit for members or their relatives.
s66 SIS Act
Related-party rules
No acquiring assets from members or relatives, except listed shares and business real property at market value. All transactions arm's-length.
Reg 4.09
Investment Strategy
A written, regularly reviewed strategy covering risk, return, diversification, liquidity, ability to pay liabilities and member insurance.
Ready to put a strategy in place? Start your SMSF setup →