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SMSF Investment Strategy Template

An SMSF investment strategy is a mandatory document required by regulation 4.09 of the Superannuation Industry (Supervision) Regulations 1994 (Cth). Our free Australian SMSF investment strategy template helps you document your fund's investment objectives, asset allocation, risk tolerance, and insurance considerations in compliance with ATO requirements.

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SMSF INVESTMENT STRATEGY
Thompson Family Superannuation Fund · Australia
STRATEGY DETAILS
FUND NAMEThompson Family Superannuation Fund
FUND ABN12 345 678 901
TRUSTEEThompson Super Pty Ltd
STRATEGY DATE1 June 2026
NEXT REVIEW DATE1 June 2027
RISK PROFILEGrowth
ASSET CLASSES5
TOTAL TARGET ALLOCATION100.0%
Strategy Date: 1 June 2026
Next Review: 1 June 2027 · Growth Profile
This Investment Strategy has been formulated by Thompson Super Pty Ltd as Trustee of the Thompson Family Superannuation Fund (the "Fund") in accordance with Regulation 4.09 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) ("SIS Reg 4.09"). This document must be reviewed at least annually and whenever a significant change in the Fund's or members' circumstances occurs. This Strategy takes effect from 1 June 2026 and supersedes all prior investment strategies.
1.
INVESTMENT OBJECTIVES
The Trustee has considered the investment objectives of the Fund having regard to the circumstances, age, and retirement needs of all members. The risk profile adopted is: Growth — predominantly growth assets (shares, property), higher volatility accepted for higher returns. The primary objective of the Fund is to achieve long-term capital growth to fund a comfortable retirement for both members, targeting a real return of CPI + 4% per annum over any 7-year rolling period. In formulating this Strategy, the Trustee has considered: (a) the risk and likely return from investments, recognising the need to balance risk and return; (b) the composition of the Fund's investments as a whole, including the extent to which they are diversified; (c) the liquidity of the Fund's investments, having regard to expected cash flow requirements; (d) the ability of the Fund to discharge its existing and prospective liabilities; and (e) whether the Trustee should hold a contract of insurance that provides insurance cover for members (SIS Reg 4.09(e)). All investment decisions must be consistent with the sole purpose test under section 62 of the Superannuation Industry (Supervision) Act 1993 (Cth).
2.
ASSET CLASS ALLOCATION RANGES
The Trustee has set the following target asset allocation for the Fund. Allocations are target percentage ranges of the total Fund value. The Trustee will rebalance when actual allocations fall outside the stated ranges.
Asset Allocation: Cash and Term Deposits: Min 5% / Target 10% / Max 20%; Australian Shares: Min 25% / Target 40% / Max 65%; International Shares: Min 10% / Target 25% / Max 40%; Direct Property: Min 0% / Target 20% / Max 40%; Infrastructure and Bonds: Min 0% / Target 5% / Max 15%.
Total Target: 100.0% of Fund. The Trustee may hold assets outside these ranges temporarily due to cash flows or market movements, but must take reasonable steps to rebalance within a reasonable time (generally within 90 days) unless market conditions make it inadvisable.
3.
LIQUIDITY AND CASH FLOW REQUIREMENTS
The Trustee has considered the Fund's liquidity requirements by reference to expected cash flows, including: (a) regular pension payments (if applicable); (b) lump sum benefit payments when members satisfy a Condition of Release; (c) ongoing expenses of the Fund (audit fees, accounting, advisory, insurance premiums); (d) tax liabilities. The Fund currently has no pension phase members. Liquidity requirements are limited to annual expenses of approximately AUD 10,000. The Fund holds sufficient cash to cover 24 months of expenses. The Fund will maintain sufficient liquid assets (cash, term deposits, listed securities) to meet at least twelve (12) months of expected cash flow needs without requiring distressed asset sales. A minimum cash balance of at least two (2) months of expected expenses shall be maintained at all times.
4.
LIABILITIES AND FUND OBLIGATIONS
The Trustee has considered the Fund's ability to discharge its existing and prospective liabilities. Known and anticipated liabilities include: Annual SMSF audit and accounting fees (approx. AUD 3,500), ASIC corporate trustee fee (approx. AUD 310), SMSF supervisory levy. The Trustee must ensure the Fund maintains sufficient assets and liquidity to meet all known and probable liabilities as they fall due. No investment shall be made that would materially impair the Fund's ability to meet its obligations to members.
5.
TRUSTEE DECLARATION
The Trustee declares that this Investment Strategy: (a) has been formulated having regard to the whole of the Fund's circumstances, including the investment horizon, risk profile, and needs of all members; (b) complies with Regulation 4.09 of the SIS Regulations and is consistent with the Fund's trust deed; (c) will be reviewed at least annually, or earlier if there is a significant change in the Fund's or any member's circumstances; (d) does not constitute financial advice to any member and is a compliance document only. Members seeking personal financial advice are encouraged to consult a licensed financial adviser (AFSL holder). This Strategy will be retained for a minimum of ten (10) years as required by section 35E of SISA.
6.
INSURANCE REVIEW AND CONSIDERATION
Insurance Consideration (SIS Reg 4.09(e)): The Trustee has considered and determined that the Fund should hold insurance for members at this time. Insurance provision details: Life and TPD insurance for both members via separate retail policies (not held within the SMSF). The Trustee has determined that holding insurance within the fund is not cost-effective given the existing retail coverage. The Trustee has reviewed the insurance needs of all members in the context of each member's: (a) age, health, and financial circumstances; (b) any personal insurance already held outside super; (c) the member's dependants and estate planning needs. Any insurance policy held by the Fund must be consistent with the sole purpose test — benefit payments under the policy must satisfy a Condition of Release. The Trustee must review insurance cover whenever a member's circumstances change materially.
7.
DIVERSIFICATION AND CONCENTRATION LIMITS
Diversification Strategy: The Trustee has considered the benefits of investment diversification in formulating this Strategy. The Fund's asset allocation across 5 asset classes is designed to reduce concentration risk while seeking appropriate risk-adjusted returns for the Fund's risk profile. The Growth profile is appropriate given both members are aged under 55 and have a minimum 15-year investment horizon. Diversification is achieved through exposure to listed equities, direct property, and income assets. Concentration Limit: No single investment (other than cash and term deposits with authorised deposit-taking institutions) shall exceed 35% of total Fund assets at the time of acquisition, except where the Trustee determines that a higher concentration is in the best interests of members and the reasons are documented. Performance Benchmarks: The Trustee will measure Fund investment performance against the following benchmarks: cash against the RBA cash rate; Australian shares against the ASX 200 Total Return Index; international shares against the MSCI World ex-Australia Index (AUD hedged); property against the MSCI/Mercer Australian Core Wholesale Property Fund Index. Annual performance review will compare Fund returns against these benchmarks to assess whether the investment strategy continues to deliver appropriate risk-adjusted returns.
8.
STRATEGY REVIEW AND MONITORING
Review Frequency: This Investment Strategy will be formally reviewed annually. The Trustee will document the outcome of each review, including whether the Strategy remains appropriate or requires amendment. Trigger Events: In addition to scheduled reviews, the Trustee must promptly review this Strategy upon occurrence of any of the following trigger events: (a) a significant change in the financial position or personal circumstances of any member (e.g. divorce, serious illness, change in employment); (b) a member's retirement or commencement of a pension phase; (c) admission of a new member or departure of an existing member; (d) a material change in market conditions or the availability of a particular investment type; (e) a significant change in the Fund's asset allocation drifting outside the stated ranges. Additional Monitoring: Quarterly performance monitoring against benchmarks. Any asset class drifting more than 10% from target triggers a rebalancing review. The Trustee will retain records of all investment decisions, strategy reviews, and amendments for at least ten (10) years as required by section 35E of SISA. Copies of this Strategy and all prior versions must be available for inspection by the SMSF auditor on request.
TRUSTEE
Thompson Super Pty Ltd
Date: ____________________

What Is an SMSF Investment Strategy?

An investment strategy is a written document that records the investment decisions, objectives, and risk considerations of an Australian self-managed superannuation fund (SMSF). Every SMSF is required by regulation 4.09 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) to prepare and implement an investment strategy and to review it regularly. The strategy is not lodged with the ATO but must be available to the SMSF's approved auditor at each annual audit.

The investment strategy must address five key elements under regulation 4.09(2): (a) the risk involved in and likely return from the fund's investments; (b) the composition and diversification of the fund's investments; (c) the liquidity of the fund's investments given expected cash flow requirements; (d) the ability to pay benefits as they become due; and (e) the insurance needs of each member. The ATO has indicated that a generic "catch-all" strategy is not sufficient — the strategy must be tailored to the fund's specific circumstances and members.

The Australian Taxation Office audits SMSF investment strategies through the annual audit process. From 2022–23, the ATO issued compliance alerts targeting SMSFs with concentrated portfolios (particularly those holding more than 90% in a single asset class) where the investment strategy did not justify the concentration. Australians operating SMSFs are required to review and update the strategy at least annually, and whenever there is a material change in the fund's circumstances, such as a member joining, retiring, or approaching pension age.

What's Covered in This Template

Our Australian SMSF investment strategy template covers all five mandatory elements under SIS Reg 4.09.

Fund and Member Details

Fund name, ABN, and summary of member ages, balances, and retirement timeframes.

Investment Objectives

Target real return and benchmark against CPI, reflecting members' retirement goals.

Risk and Return Considerations

Assessment of investment risk tolerance and expected long-term returns for each asset class.

Diversification Policy

Target asset allocation ranges across Australian equities, international equities, property, fixed income, and cash.

Liquidity Management

Ensuring sufficient liquid assets to meet benefit payments, pension obligations, and operating expenses.

Cash Flow and Benefits

Projected cash needs for member pensions, lump sum withdrawals, and annual fund expenses.

Member Insurance Needs

Assessment of whether each member requires life, total and permanent disability, or income protection insurance.

Related-Party and In-House Assets

Policy on investments in related-party assets and in-house asset limits under Part 8 of the SISA.

LRBA Policy

Borrowing policy and limits for limited recourse borrowing arrangements under section 67A of the SISA.

Review and Amendment

Annual review obligations and procedure for updating the strategy as circumstances change.

How to Create an SMSF Investment Strategy

Follow these steps to prepare a compliant Australian SMSF investment strategy.

  1. 1

    Review Member Circumstances

    Consider the age, account balance, contribution history, and retirement timeline of each SMSF member.

  2. 2

    Set Investment Objectives

    Define the fund's target real return and the investment approach needed to achieve it over the members' investment horizon.

  3. 3

    Determine Asset Allocation

    Specify target and permitted ranges for each asset class, including the rationale for any concentrated positions.

  4. 4

    Address Insurance and Liquidity

    Document each member's insurance needs and confirm the fund holds sufficient liquid assets for expected cash outflows.

  5. 5

    Date, Sign, and Review Annually

    All trustees sign the strategy. Set a review reminder for at least 12 months from signing, or earlier if a material change occurs.

Legal Considerations

The ATO has issued compliance alerts targeting SMSFs with inadequate or generic investment strategies.

This template is for informational purposes only and does not constitute financial advice. An SMSF investment strategy should be prepared with input from a licensed financial adviser who holds an Australian financial services licence (AFSL). Seek professional advice before making investment decisions.

Reviewed for Australian law

Regulation 4.09 Requirements

Regulation 4.09 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) requires SMSF trustees to formulate, regularly review, and give effect to an investment strategy that takes into account the whole circumstances of the fund. The strategy must address risk, return, diversification, liquidity, cash flow, and insurance. The ATO can issue rectification directions and administrative penalties to trustees who fail to maintain a compliant strategy. An SMSF auditor who identifies a missing or inadequate strategy must report the contravention to the ATO on the annual return.

Concentrated Portfolio ATO Alert

From 2022–23, the Australian Taxation Office began contacting SMSF trustees whose funds held 90% or more of assets in a single asset class (particularly residential property) without a documented rationale in the investment strategy. Australian trustees must be able to explain in writing why a concentrated portfolio is appropriate for the specific circumstances of the fund and its members. The strategy should include a statement on diversification — even if the trustees accept concentration risk — to satisfy the auditor and ATO requirements.

Insurance Considerations

From 1 July 2014, regulation 4.09(2)(e) requires Australian SMSF trustees to specifically consider whether members need life insurance, total and permanent disability (TPD) insurance, or income protection insurance through the fund. The strategy must address this for each member individually. If no insurance is held, the trustees must document the reasons — for example, that the member already holds sufficient personal insurance outside superannuation, or that the cost is not in the member's best interests.

In-House Assets and LRBA Restrictions

Part 8 of the Superannuation Industry (Supervision) Act 1993 (Cth) limits in-house asset investments to no more than 5% of the fund's assets. In-house assets include loans to related parties, investments in related trusts, and leases of fund assets to related parties. The investment strategy must confirm whether the fund holds or intends to hold in-house assets and confirm compliance with the 5% limit. Where the fund operates an LRBA under section 67A, the strategy should address how the borrowing interacts with the fund's overall risk and return objectives.

Frequently Asked Questions

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