SMSFs can still invest in a wide range of assets. Even after the new rules, a self-managed super fund can hold shares, ETFs, managed funds, cash and term deposits, fixed income and bonds, commercial property, ungeared residential property, listed property and REITs, and some niche assets like precious metals. Only new borrowing to buy residential property is banned, not SMSFs or property itself.

If you’re feeling unsettled by the rule changes, it can help to focus on what hasn’t changed: SMSFs remain a flexible way to build retirement savings when the investments are matched to your goals, time frame and risk tolerance.

This article is general information only. It is not personal financial advice. Before acting, you should speak with a licensed financial adviser or SMSF accountant in Brisbane or your local area who understands your situation.

What Changed for SMSFs and What Stayed the Same?

Many trustees are worried that SMSFs have “stopped working” after the LRBA changes. That’s not the case. The main change is that new limited recourse borrowing arrangements, or LRBAs, where an SMSF borrows under a loan and the lender only has recourse to the specific asset, are now banned for residential property from around early August following Royal Assent on 26 June 2026. That rule targets geared residential property inside SMSFs, not SMSFs themselves.

What is still allowed includes:

• Buying residential property outright with existing SMSF money  
• Entering new LRBAs for commercial or business real property  
• Keeping and paying off existing residential LRBAs that were in place before the start date  

For trustees whose main concern is, “Can I keep my strategy on track?” it helps to remember that the structure, tax treatment and most investment options remain in place.

The Australian Taxation Office, or ATO, regulates SMSFs and applies rules like the sole purpose test, which requires the fund to exist only to provide retirement or death benefits. Your investment options are also shaped by whether your fund is in accumulation phase or paying a pension in retirement phase.

To ease some of the worry many families feel, here are seven broad investment options that remain available to SMSFs:

• Australian and international shares  
• Exchange-traded funds (ETFs)  
• Managed funds  
• Cash and term deposits  
• Fixed income and bonds  
• Commercial and business real property  
• Ungeared residential property and listed property such as REITs  

What Are the Main SMSF Investment Options Beyond Property?

If your mindset is, “What else can we use to grow our retirement savings now?” there are still plenty of options. Outside geared residential property, SMSFs can continue to build diversified portfolios.

The main options include:

• Australian and international shares, for growth and dividends  
• ETFs, for quick diversification across markets  
• Managed funds, for professional management  
• Cash and term deposits, for stability and liquidity  
• Fixed income and bonds, for income with lower volatility than shares  
• Commercial and business real property, including business premises  
• Ungeared residential property and listed property trusts and REITs  

Some trustees, particularly those with higher risk tolerance and more experience, also consider niche assets like precious metals or certain collectibles. These have strict ATO rules around storage, insurance and use, and usually only suit experienced trustees who have strong advice and are comfortable with extra scrutiny.

Are Shares a Good Investment Option for an SMSF?

For trustees focused on long-term growth and comfortable with market ups and downs, Australian and international shares can be a suitable SMSF investment when they match the fund’s written investment strategy and risk profile. Shares can help grow your super balance over time through potential capital growth and dividend income.

Australian shares often come with franking credits, which can be valuable in the SMSF tax environment. They may also feel more familiar, with brands you know. International shares can spread your risk across countries and sectors that are under-represented on the ASX.

Trustees need to manage:

• Market volatility and the chance of short-term losses  
• Diversification across sectors, countries and individual companies  
• Regular reviews of the portfolio against the fund’s strategy  
• Accurate record-keeping for trades, income and corporate actions  

Many SMSF trustees work with a licensed adviser or an SMSF accountant in Brisbane or their own city to build a share strategy that meets ATO requirements and supports their retirement goals.

How Do ETFs and Managed Funds Help SMSF Diversification?

If you prefer a “set and monitor” approach rather than picking individual investments, ETFs and managed funds often give everyday trustees an easier way to diversify without having to research dozens of individual holdings. By spreading money across many assets, they may reduce the impact if a single company or bond performs poorly.

For ETFs:

• They trade on the ASX like shares  
• Many track an index, such as a broad share market or bond index  
• Fees are usually lower than many active funds  
• They can provide quick exposure to Australian shares, global shares, bonds or specific sectors  

Managed funds are pooled investments where a professional manager selects the underlying assets. They can be:

• Actively managed, where the manager aims to outperform a benchmark  
• Passively managed, where they track an index like many ETFs  
• Subject to minimum investment amounts and different withdrawal rules  

Both ETFs and managed funds must still:

• Align with the SMSF’s documented investment strategy  
• Pass the ATO’s sole purpose test  
• Be properly documented in trustee minutes and records  

Are Cash, Term Deposits, Bonds, and Property Still Worth It?

Trustees who prioritise capital stability and predictable income, especially as they approach or enter retirement, often focus on cash, term deposits and fixed income. These can still play a central role in SMSFs. They provide stability, help smooth out share market swings and can fund pension payments and expenses.

For cash and term deposits:

• Capital is generally stable, particularly with deposits in Australian banks up to the government guarantee limits  
• Interest rates can change, affecting returns  
• They are useful as a liquidity reserve so the fund is not forced to sell growth assets at a bad time  

For bonds and other fixed income:

• Government and corporate bonds usually pay regular interest  
• They are typically lower risk than shares, but still have interest-rate and credit risk  
• They can add a predictable income stream inside the SMSF  

Property is also still on the table. For trustees whose mindset is “Property is central to our strategy”, SMSFs can still use property in several ways, within the new rules. SMSFs can:

• Buy residential property outright without borrowing, with rent paid back to the fund at market rates from arm’s length tenants  
• Own commercial or business real property, such as business premises, and lease it to a related business at market rent  
• Use new LRBAs for commercial and business real property, as these remain permitted  

Listed property such as REITs can give property exposure without the costs and admin of direct ownership. Niche assets like precious metals are allowed in some cases but have strict rules on storage, insurance and personal use.

Why Structure, Tax Rules and Trustee Duties Matter

Regardless of whether you are a growth-focused or capital-preservation-focused trustee, the key benefit of an SMSF is not just what it can invest in, but the control trustees have within a concessional tax structure. In accumulation phase, fund earnings and most capital gains are generally taxed at 15 per cent. On assets that support a retirement phase income stream, earnings may be tax-free, subject to transfer balance cap limits.

This means trustees can manage:

• When to realise gains or losses inside the fund  
• How to use franking credits from Australian shares  
• The timing of contributions and pensions in line with their retirement plan  

The trade-off is extra responsibility. Trustees must:

• Meet the ATO’s sole purpose test, with no personal or present-day benefit from fund assets  
• Maintain a written investment strategy that covers risk, diversification, liquidity and insurance  
• Keep dealings at arm’s length, comply with in-house asset limits and restrictions on related party transactions  
• Arrange an annual independent audit, with the ATO overseeing compliance, and take note of wider standards that also apply to super, including APRA benchmarks where relevant  

Despite the LRBA changes, SMSFs can still use a broad mix of investments beyond geared residential property. The real task is to match those options to your goals, time frame and risk tolerance, within the rules and in line with the way you prefer to manage risk and decision making.

FAQ

Can an SMSF still buy an investment property after the LRBA ban?  

Yes. An SMSF can still buy residential property outright using existing fund money and can still use new LRBAs for commercial and business real property. The change affects only new LRBAs for residential property, not property ownership more generally, and existing qualifying loans are grandfathered.

What investments are banned in an SMSF?  

SMSFs cannot invest in ways that breach the sole purpose test, arm’s length rules, in-house asset limits or specific superannuation law restrictions. For example, using fund assets for personal use, such as holiday homes or art on your wall, is generally not allowed. The new rules also ban new residential property LRBAs after the start date.

Can my SMSF borrow to buy shares or commercial property?  

New LRBAs for commercial and business real property are still permitted if they meet super law and ATO requirements. Borrowing to buy shares is more complex and subject to strict LRBA conditions, and new borrowing for residential property is now banned. Trustees should obtain specialist advice before any borrowing.

How much do I need to start an SMSF?  

There is no legal minimum balance to start an SMSF. However, the ATO and many advisers suggest that SMSFs generally suit people with higher super balances, because running costs and responsibilities are higher than for many other super options. A licensed adviser can help you compare structures.

Are ETFs or direct shares better for an SMSF?  

Neither is automatically better. Direct shares give more control and flexibility, while ETFs can offer instant diversification and simpler management. The right mix depends on your fund’s investment strategy, your experience and the time you are willing to spend managing the portfolio.

Secure Your SMSF Future With Expert Local Guidance

If you are ready to take the next step with your super, our team at HW One is here to help you make confident, informed decisions. Work directly with an experienced SMSF accountant in Brisbane who understands both the regulations and the practical realities of managing your fund. Reach out today through our contact page so we can discuss your goals and outline the next steps.