Derivatives

SMSFs can invest in complex CFDs, but trustees must understand the risks and ensure the investment complies with SIS legislation.

One of the main reasons SMSF trustees invest in risky assets such as derivatives and options is that they think they can outperform the market and get a quick return. Because SMSF trustees will keep investing in high-risk assets no matter what, SMSF professionals need to understand derivative investments to ensure fund compliance.