Highlights

  • SMSF investment strategies must be documented in writing, reviewed annually, and aligned with the trust deed.
  • Auditors check annually whether the strategy is consistent with both the deed and the fund's actual investment activities.
  • The government announced in August 2026 a proposal requiring a written strategy before fund registration, though this is not yet law.
  • A strategy that permits investments the deed does not authorise creates a compliance gap that auditors flag.

An SMSF's investment strategy is not a set-and-forget document. It must be held in writing, reviewed each year, and remain consistent with the fund's trust deed. Each of these obligations is separately enforceable, and auditors test all three annually.

The Written Requirement

The SIS Regulations require an SMSF to formulate, review regularly, and give effect to a written investment strategy. An unwritten or informal understanding about how the fund invests does not satisfy this requirement. The strategy must address the risk and likely return of assets, the composition of investments, the liquidity of assets, and the ability of the fund to pay benefits.

At each annual audit, the SMSF auditor examines whether a written strategy exists, whether it was reviewed in the year, and whether the fund's actual investments accord with it. A strategy that exists on paper but does not reflect the fund's real holdings creates a compliance issue regardless of what the document says.

Alignment With the Trust Deed

The trust deed is the foundational document that sets out what the fund can and cannot do. An investment strategy that proposes activities not authorised by the deed, such as investing in asset classes the deed prohibits, creates a conflict that needs to be resolved by updating one or both documents.

Trustees should ensure that when the strategy is reviewed each year, the reviewers also check it against the deed. If the deed was established many years ago and has not been updated, it may not contemplate modern asset classes or structures that the fund now holds or intends to hold.

Proposed Government Change

In August 2026 the government announced a proposal that would require new SMSFs to have a written investment strategy in place before the fund is registered. This would make a strategy a prerequisite for establishment rather than an obligation that arises after registration. As at October 2026 this proposal had not yet been enacted into law.