Self-managed super funds (SMSFs) and property have a long love affair in Australia. But a fund that holds little beyond a single property — often with a loan attached — can be dangerously undiversified. The good news: an SMSF can do a lot more.

Here's a plain-English look at how SMSFs can invest in shares and other assets, and the rules trustees need to keep front of mind. (This is general information only — SMSF decisions should always be checked with a licensed adviser and your accountant.)

Yes — SMSFs can invest in shares

Subject to your fund's trust deed and investment strategy, an SMSF can typically hold:

  • Australian listed shares and ETFs
  • International shares and global funds
  • Managed funds and listed investment companies
  • Cash, term deposits and bonds
  • Direct property (residential or commercial, with strict rules)

That flexibility is one of the main attractions of running your own fund — but with it comes responsibility.

The rules trustees must respect

  • The sole purpose test. Every investment must be for the genuine purpose of providing retirement benefits — not present-day perks.
  • A documented investment strategy. Trustees must set, and regularly review, a strategy that explicitly considers diversification, risk, liquidity and the ability to pay benefits.
  • Arm's-length dealing. Assets must be bought and sold at market value, and you generally can't buy residential property from a related party.
  • Liquidity. A fund that's all property can struggle to pay pensions or meet expenses — shares and cash help here.
The ATO has repeatedly flagged poorly diversified SMSFs — particularly those concentrated in a single geared property — as a key risk. A balanced mix isn't just smart; it's part of a trustee's duty.

Shares vs property inside super

Shares offer liquidity, low costs and easy diversification; property offers tangibility and the potential for leverage through a limited recourse borrowing arrangement. Many well-run SMSFs hold both, alongside cash. For more on the broader trade-off, see our guide to property versus shares in 2026.

Get the strategy reviewed

Whether you're starting an SMSF or rebalancing an existing one, the investment strategy is the document that ties it all together — and it's exactly the kind of work where professional SMSF advice pays for itself.