Self Managed Super Fund (SMSF): Everything you need to know! | Bulk Bullion

The price of gold has risen by an annual average of 9% since the 1970s. Holding gold as part of a diversified portfolio can offer benefits to investors, including self-managed super fund (SMSF) trustees.

Here are the top five reasons why individuals may choose to purchase gold, silver or platinum bullion within their Self-Managed Superannuation Fund (SMSF) in Australia:

1. Diversification of Assets: Bullion, such as gold and silver, offers diversification benefits within an investment portfolio. Holding bullion in an SMSF can help spread risk across different asset classes, reducing overall portfolio volatility and providing a hedge against economic uncertainties.
2. Preservation of Wealth: Bullion is often viewed as a store of value and a hedge against inflation and currency devaluation. Including bullion in an SMSF can help preserve the purchasing power of retirement savings over the long term, especially during times of economic instability or currency fluctuations.
3. Long-Term Growth Potential: Historically, bullion, particularly gold, has shown long-term growth potential, often outperforming other asset classes during periods of economic turmoil or market downturns. By holding bullion in an SMSF, investors may benefit from potential capital appreciation over time, contributing to the growth of retirement savings.
   
4. Portfolio Insurance: Bullion can serve as a form of insurance within an investment portfolio, providing protection against systemic risks, geopolitical tensions, and financial crises. Including bullion in an SMSF can help safeguard retirement savings against unforeseen events and black swan events that may impact traditional financial assets.
5. Portfolio Hedging: Bullion, particularly gold, is often considered a safe haven asset that tends to move inversely to other financial assets such as stocks and bonds. Holding bullion in an SMSF can provide a hedge against equity market downturns and currency fluctuations, helping to stabilize the overall portfolio performance during periods of market volatility.

These reasons illustrate why individuals may choose to include bullion in their SMSF investment strategy, aiming to diversify, preserve wealth, and mitigate risks while pursuing long-term growth and stability for their retirement savings.

Types of Precious Metals:

In Australia, the Australian Taxation Office (ATO) allows Self-Managed Superannuation Funds (SMSFs) to invest in certain types of precious metals for investment purposes. The commonly accepted types of metals that can be purchased within an SMSF include:

• Gold: Gold is one of the most popular metals for SMSF investment. It has historically been considered a store of value and a hedge against economic uncertainty and inflation.
• Silver: Like gold, silver is also considered a precious metal with investment potential. It is often viewed as a more affordable alternative to gold and can serve as a diversification asset within an SMSF portfolio.
• Platinum: Platinum is a rare and valuable metal that is used in various industrial applications, including automotive catalytic converters and jewellery. It can provide diversification benefits and potential long-term growth within an SMSF portfolio.

Setting up and purchasing bullion inside of your SMSF is a very simple process. To take the first steps to purchasing in your SMSF, contact us here