Can you invest in precious metals for your Super?
A self-managed superannuation fund protects your wealth and assets until the day you retire. Precious metals are an allowable asset that an SMSF can hold, and a popular consideration to preserve wealth.
Safeguarding your future
Financial advisers will tell you of the importance of a diversified portfolio.
Precious metal is an asset many investors seek when economic markets are uncertain. Why is this so?
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 or silver appreciates as it has done for the past decade.
- Unlike other investments, gold and silver bullion will always be considered precious.
- Bullion is a great tool to diversify your portfolio and protect your wealth (insurance) – precious metals have a longstanding track record, and will always be considered lucrative.
- There is potential to see a higher return on your investment, if and when the value of gold and silver appreciates.
Super Products for Super Investment
There are a number of things SMSF Trustees should consider when selecting the right assets to invest in for their SMSF portfolio:
– liquidity & ability to quickly buy and sell
– correlation to other assets in their portfolio
– asset’s purpose such as a crisis or inflation hedge
– management and production costs
To address many of the points above, a logical choice to invest in precious metals for your SMSF is to choose a Pool Allocated product.
How to invest in precious metals using my SMSF
If you are the Trustee of your SMSF you have the ability to add precious metals as an asset to your investment portfolio, although there are a few things to be aware of before you do.
The type of precious metals
Not all products are allowable, for example, some coins and unique items where the face value exceeds the metal value would be considered “Collectible” and are therefore not permitted as an asset. Bullion bars, bullion coins and Pool Allocated products are the most popular.
Where the assets are kept
As the Trustee, you are responsible for ensuring all assets are securely protected. While physical precious metals can be kept at home, it is generally recommended they are stored in a dedicated vault service.
Reporting & Auditing
For each Financial Year the auditor of your fund will require a resolution as of 30 June which confirms:
- Inventory on hand including the type and quantity of precious metal
- Details of insurance including correct replacement value
- Storage details to prove the assets are not available for personal use by the members of the fund
For more information, please contact our team.