Super Fund Investment
Can your Self -Managed Super Fund
invest in precious metals?
Yes, it can! There are different types of investments that an SMSF can hold and precious metals are one of the allowable asset classes. Before going down this path, it is important to understand not only your options, but the rules that surround the holding of these assets.
When an SMSF member is considering investing in gold or other precious metals such as Silver or Platinum, they need to consider whether the investment could fall within the definition of collectables and personal use assets.
A gold, silver or platinum investment could be in bullion, coins or ingots.
Gold bullion is a recognised weight and fineness of gold that can be purchased for the current price of gold. The word “bullion” means a refined and stamped weight of precious metal. Most people think of it as large gold bricks or gold bars.
Gold ingots are also sometimes referred to as gold bars, but they are formed differently than the minted bars. With ingots the weight contained can vary as these bars are poured instead of stamped. They are usually thicker than the stamped bars.
Gold coins can be found in two different types. Those valued for the bullion amount (i.e. bullion coins) or those with historical value which are often rare, called numismatic coins.
- Bullion coinsare valued solely on the precious metal they contain and the demand for the metal.
- Numismatic coinsmay often have a value greater than that of the precious metals the coins contain. Numismatic coins may also have extra costs embedded into their price due to their rarity, grade, and demand.
For more details on collectable and personal use assets, please refer to the following link: https://www.ato.gov.au/Super/Self-managed-super-funds/Investing/Restrictions-on-investments/Collectables-and-personal-use-assets/
Safeguarding your future
The importance of a diversified portfolio
This is a technique that reduces risk by allocating investments among various financial instruments, industries, and other categories. It aims to maximise returns by investing in different areas that would each react differently to the same event.
There are many reasons to invest in metals to diversify your SMSF and one in particular is that Gold Preserves Wealth. The reasons for gold’s importance in the modern economy centres on the fact that it has successfully preserved wealth throughout thousands of generations. The same, however, cannot be said about paper-denominated Fiat currencies.
Gold is an insurance policy that can preserve wealth. It’s like a rainy-day fund to protect you against falling real estate prices, sporadic inflations, and volatile global market conditions. You may also increase your wealth along the way if gold, silver and other metals appreciates as it has done for the past decade.
- Unlike other investments, gold, silver and platinum will always be considered precious.
- Physical precious metals have no 3rd party risk
- Bullion is a great tool to diversify your portfolio and protect your wealth (insurance) – precious metals have a longstanding track record
- There is potential to see a higher return on your investment, if and when the value appreciates.
What type of precious metals are most suitable for SMSF’s?
There are several things SMSF Trustees should consider when selecting the most appropriate assets for their SMSF portfolios:
- Liquidity & ability to quickly buy and sell
- Correlation to other assets in their portfolio
- Asset’s purpose such as a crisis or inflation hedge
- Fees & costs such as storage, audits & insurance
An SMSF can invest in gold as long as it is not acquired from a related party. The key issues to consider when an SMSF buys gold, or other bullion bars or gold ingots are:
- The storage and protection of the precious metal assets. It is recommended the precious metal assets are stored in a secure place such as a dedicated vault service and not at the SMSF member’s home.
- The precious metal should be insured to the value of the investment in the name of the SMSF.
- The maintenance of the purchase and sales documents of the precious metal investments.
Yes. The ATO has a stricter set of rules when you have bullion holdings in a SMSF.
The fund will be required to provide proof on the following to the funds auditor at year end.
- Where the asset is being stored.
- Insurance certificate to verify the bullion is insured
In our safe deposit box facility, all of this can be achieved with ease. As you are the only key holder of your SDB, only you have access whenever you require.
You will have insurance for the full value of the SMSF bullion investment. Our purpose-built vault and safe deposit boxes offer state-of-the-are security. Independant audits can be performed on a frequent basis upon request to ensure ongoing conformity, integrity and clarity.
You will have insurance of the full value of your bullion investment. Our purpose-built vault and safe deposit boxes offer state-of-the-art security. Independent Audits can be performed on a frequent basis upon request to ensure ongoing conformity, integrity and clarity.