Managed Investment Schemes

Managed Investment Schemes (MIS’s) allow investors to access assets that may be financially out of their reach or to diversify across a broader base within an asset class. MIS’s are suitable for use within an SMSF provided.

1. Your Trust Deed allows investment in MIS’s; and

2. The Investment Strategy allows for MIS’s investments.

The Investment Strategy and Trust Deed we supply when setting up an SMSF in Superannuation Warehouse allows you to invest in MIS’s within your SMSF.

Trustees should be careful when investing in MIS’s. These investments gets frozen, or you loose them, and there is no government bodies you can approach to recover the investments. The Trustee carries the risks.

Capital preservation is generally the number one objective in your SMSF.

MIS Diagram

Source – Citola Capital Partners LLP

By selecting investments carefully, SMSF Trustees can reduce portfolio volatility and minimize or defer tax assessment, thereby improving the asset value/performance of the fund.

Although the rate if taxation on superannuation funds is relatively low, it still has a negative impact on growth within a fund with assessment on:

  • Contributions
  • Earnings
  • Capital Gains

Investments that have been granted an ATO product ruling, such as a tax effective MIS, can provide an SMSF with benefits through taxation planning and portfolio diversification.

A Forestry MIS can have numerous structures and elements that can affect the outcome of the scheme.

Of the projects that have been offered to investors over several decades, some of the more recent have had problems attributable to structural elements. Nevertheless, many reputable projects have also been offered.

A sound structure ensures that:

  • Ongoing maintenance costs are available annually;
  • Solvency of the Responsible Entity is not dependent on future project sales;
  • Annual holding costs of project land are met within commercial arrangements, securing land tenure.

An example of an MIS project displaying these characteristics is the Premium African Mahogany 2012 Project.

Always read the project’s Product Disclosure Statement (PDS) thoroughly and consult your accountant or financial professional about the suitability of any MIS project with regard to your current financial situation and goals. Most of these investments will have research reports that are available on request, and will clearly layout the pros and cons of the investment. We strongly recommend that you take the time to study any research material that is available to you.

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