Contracts for Difference (known as CFDs) are synthetic financial products that allow you to access the movement in price of shares and other financial instruments such as stock indices, commodities, currencies and futures contracts without owning the underlying product.
As a Trustee of an SMSF, take care when trading CFDs as these are leveraged products. It is, however, legal to trade CFDs in your SMSF provided:
1. Your Trust Deed allows investment in CFDs; and
2. The Investment Strategy allows for CFD investments.
When setting up your SMSF, Superannuation Warehouse will supply you with a template of the Investment Strategy that you may wish to edit with your investment objectives. We will also supply a Trust Deed and Minutes to be signed noting the establishment of your SMSF.
You can trade CFDs through a broker of your choice, the monthly fee on your SMSF will be $79.
There are two ATO interpretive decisions supporting the buying of CFDs in an SMSF.
Investing in Shares or CFDs is allowed as long as the Trust Deed and Investment Strategy accommodates this type of investment. Superannuation Warehouse covers these areas as part of the standard SMSF setup.
Therefore, investment in CFDs is allowed.