Can SMSFs Trade CFDs?
Can Self Managed Super Funds (SMSF) Trade CFDs?
If you are thinking about trading CFDs using your SMSF but are unsure if it’s allowed, then you have come to the right place.
You may have already conducted a few Google searches, hoping to find information on whether you can trade CFDs using your SMSF. It’s likely that this search was fruitless as there isn’t a lot of available info on the subject. But have no fear, we are here to help!
So, Can You Trade CFDs Using Your Australian SMSF Account?
Yes – trading CFDs using your self managed superannuation fund in Australia is completely legal. However, it must be noted that you can only trade CFDs using your SMSF provided that;
(1) Your Trust Deed allows investment in CFD’s and;
(2) The Investment Strategy allows for CFD investments.
A trustee of a complying superannuation fund should always consider the following before trading CFDs;
- prohibitions on borrowing & charging assets, and whether dealing in CFDs would breach those prohibitions;
- that dealing in CFDs is in a complying super fund’s investment strategy, together with the fiduciary duties and other obligations owed by trustees;
- the necessity for trustees of a complying superannuation fund to be familiar with the risk involved in dealing in CFDs. And the need to have in place adequate risk management procedures to manage the risks associated in dealing with CFDs, and;
- the consequences of including adverse taxation consequences if a superannuation fund fails to meet the requirements for it to continue to have complying status.
Best CFD Broker that offers SMSF CFD Trading Accounts
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Clients who apply for a SMSF account with City Index will have access to all the benefits mentioned above.
What is a SMSF?
One SMSF can have up to 4 trustees (members) and is set-up as a trust, with all conditions and rules clearly outlined in the trust deed.
Benefits of a Self-Managed Super Fund
Flexibility, control and choice: SMSF’s allow individuals (or up to 4 trustees) to have total control over their investment decisions, rather than rely on a Fund Manager to invest its funds. With a SMSF, trustees can access ASX stocks, international stocks, investment properties, fixed interest, bonds, CFDs and more. This gives SMSFs much more flexibility over a retail super fund.
Tax benefits: SMSF can utilise a range of tax strategies to help grow superannuation savings and reduce tax liabilities. This is particularly important the closer any trustees move towards retirement age. Some carefully considered tax strategies can benefit the SMSF quite substantially.
Complete transparency: have complete visibility and control over where your money is invested. This allows individual trustees to align personal goals with investment decisions.
Lower admin fees: members of a SMSF might see considerable savings in admin fees compared to a retail super fund. This might be the case because admin fees might be capped rather than based on a % of the balance.