SMSF trustees need to meet the diversification requirement under SISR4.09.
SISR 4.09 (2) states:
The trustee of the entity must formulate, review regularly and give effect to an investment strategy that has regard to the whole of the circumstances of the entity including, but not limited to, the following:
(a) the risk involved in making, holding and realising, and the likely return from, the entity’s investments, having regard to its objectives and expected cash flow requirements;
(b) the composition of the entity’s investments as a whole, including the extent to which they are diverse or involve exposure of the entity to risks from inadequate diversification;
(c) the liquidity of the entity’s investments, having regard to its expected cash flow requirements;
(d) the ability of the entity to discharge its existing and prospective liabilities.
SISR4.09 requires trustees to consider diversification but this requirement is not compulsory.
However, SMSF trustees may be at risks of breaching SISR4.09 in relation to the diversification requirement if:
If your SMSF only has one asset, such as property or a single asset class, such as crypto-currency, you will need to make sure your SMSF to meet the following requirements: