Sample
Investment
Strategy
Australian Stock Report Ltd
Level 3, 189 Flinders Lane, Melbourne, VIC 3000
ABN 94 106 863 978
Australian Financial Services Licence No. 301682
www.australianstockreport.com.au
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INTRODUCTION
Requirements of investment strategy
Superannuation legislation requires the Trustees of self-managed superannuation funds
(“the Fund”) to give effect to and document one or more investment strategies (“the
Strategy”) having regard to the overall circumstances of the Fund and conduct regular
monitoring of each investment strategy and the assets within the Fund.
The Strategy should reflect the overall purpose and objectives of the Fund and consider the
following:
• investing to maximise member returns accounting for the risk associated with the
investment;
• the number of members in the Fund and the circumstances of each member for
example their age, their income, their employment arrangements and their ongoing
contributions, whether to hold insurance cover for them and the type and level of
cover, potential or likelihood of them leaving the Fund and their retirement needs (for
example type of benefit required either one or more lump sums or pensions);
• diversifying investments and considering the benefits of investing across different
asset classes (i.e. property, shares, cash, fixed interest etc) via a long ‑ term
investment strategy and the members and Trustees attitudes to different investment
and portfolio characteristics; and
• the liquidity of the Fund and the ability to pay benefits to members upon retirement
and to pay other costs and expenses incurred by the Fund including the costs of
administering the Fund and taxation.
Recording investment strategy
The Strategy needs to be recorded in writing and made available to all Members and to the
Fund’s Auditor when auditing the Fund. The Strategy should be adopted by the Trustees by
resolution and retained in the Fund’s records.
The Strategy should state the Fund’s objectives, record how these objectives may be
achieved and identify a process to assess whether the objectives have been met for
example identifying the types of investments and setting some upper and lower limits that
will apply to each of the asset classes.
Fund audit
Each financial year, the Fund’s Auditor is required to conduct an audit of the Fund.
Generally the role of the Auditor is to establish the existence of a strategy, that the Members
have been advised of the Strategy and to assess the Strategy to ensure that the investments
of the Fund are consistent with the strategy and comply with the superannuation legislation.
The Australian Taxation Office may also audit the Fund, and generally there role is to
determine that there is some sort of a plan in place to provide a basis for the investment
decisions of the Fund.
The following is a sample of how the Fund may record and structure their Strategy. Whilst
there is no standard strategy that a Fund is required to develop, it is important that the
diversification of investments across different asset classes reflects the objective and overall
circumstances of the Fund and the Strategy. Please note that the sample is a guide only and
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does not address your individual circumstances. It is recommended that you seek
professional financial advice before implementing a strategy for the Fund.
SAMPLE INVESTMENT STRATEGY
Investment Strategy for _________________[insert name]Superannuation Fund
Objectives
The objective of the Fund is to:
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Provide superannuation benefits to members to meet their needs in retirement;
Invest the Fund’s assets according to the requirements of the superannuation
legislation, in an appropriate mix of investments, that will maximise the investment
return of the Fund, and support the member’s needs over a timeframe that reflects
their age and circumstances;
Maximise the tax effectiveness of the investment of the Fund’s assets to provide the
most beneficial long term after tax return for Members;
Ensure there is sufficient liquidity in the Fund to meet the expenses and liabilities of
the Fund.
(*Note: Amend, adapt or add to as appropriate).
Policies
The Trustees will conduct regular monitoring and review of the Fund’s investment
performance, the overall asset allocation of the Fund’s investments and the expected
liquidity requirements of the Fund, and at least on an annual basis. They will endeavour to
follow the Fund’s investment strategy. However, they reserve the right to change the
investment strategy, if such change would better achieve the objectives of the Fund, but will
communicate with the Member’s prior to making any change. A copy of the Fund’s
investment strategy will be provided to Members upon request.(*Note: Amend, adapt or
add to as appropriate).
Members’ circumstances
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There are [ ]members of the Fund;
The members have more than []years to normal retirement age;
There [will/will not] be ongoing contributions to the Fund;
The Members intend to take their superannuation benefits upon retirement as a
[lump sum/income stream].
(*Note: Amend the above information according to the Members’
circumstances).
Members’ Insurance
The Trustees have considered the matter of insurance for the Members of the Fund and
have decided as follows: (*Note: Amend, adapt or add to the following as appropriate).
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Insurance is not appropriate as the Members have significant assets with no
significant liabilities;
Insurance is not appropriate as it would not be cost effective for the Members due to
their age/pre-existing medical condition;
The Fund already has appropriate insurance for its Members;
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The Members have appropriate insurance outside of the Fund;
The Trustees have decided that the following cover is required: [List type of cover
for each member and amount for example death, disability, income or a
combination as appropriate].
Investment Profile
The Members would prefer a balanced portfolio of investments which should aim to provide
an average investment return of a minimum of [ %]over [ insert time frame ] period of
time.(*Note: Adapt, amend or add to as appropriate).
Investment Strategy
Based on all of the circumstances of the Fund, the Trustee’s conclude that the most
appropriate way to meet the objectives of the Fund is to invest the Fund’s assets in
[stipulate the relevant asset classes and the reasoning for the asset allocation].
Asset Allocation
To assist with the management of the Fund and to provide Members with an indication of the
proposed percentage range of the Fund’s assets invested in each asset class, the following
information is relevant:
Asset Class
% Range
Typical
Cash
Fixed Interest
Listed Property
Direct Property
Collectables
International Equity Funds
Australian Equity Funds
Australian Share Market
Direct
(* Note: Adapt as appropriate to the investment strategy).
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Signed by all Trustees
_________________________________
Dated
The template for this/these documents has been provided for use in circumstances only where the Trustees of the self managed
superannuation fund are individuals. Neither Australian Stock Report nor any of their employees (“they”) warrant that this document is
accurate, complete or relevant to your circumstances. They are not responsible for: ensuring the accuracy of the information completed by
you in the template; the validity of the document upon completion; or the proper execution of the document. They will not accept any
liability for any loss or damages arising as a result of the use of this document. You acknowledge that the provision of this template for
your completion does not constitute legal, taxation or financial advice and is not a substitute for such advice. If you are unsure as to how
to complete this template or your circumstances are outside the scope of this template then we strongly recommend that you seek
independent legal, taxation and financial advice.
Australian Stock Report Ltd (ACN 106 863 978) is licensed as an Australian Financial Services Number 301682.
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