- The diversification of the fund, that is – whether it has spread investment risk
- Whether the fund can meet expenses with its cash and other liquid assets
- Whether the fund will be in a position to pay benefits when members retire
- Each member’s age, retirement expectations and attitude to risk
- The risks involved in the SMSF’s investments as well as the capital growth and income requirements of the fund
Deciding on investments
Allocating different amounts of your portfolio to different kinds of investments helps balance risk and return over time. One approach to an SMSF investment strategy is to set a target allocation for each type of asset and an acceptable range of variance from this target.
The strategic asset allocation would then be reviewed and changed as appropriate if, for example, a member’s risk profile were to change, or as members got closer to retirement.
It’s important to review your investment strategy regularly given circumstances can change.
Need some assistance? Request a callback from our SMSF specialist team, or take a look at our dedicated SMSF page.