Investor education
Beyond shares, cash and property: alternatives through an SMSF lens
Most SMSF portfolios settle into the same three holdings. Looking beyond them, to private credit, unlisted real assets and agricultural strategies raises questions that are more practical than exotic. Here they are, in the order they should be asked.
Shaun Harvey , Investment Analyst 31 August 2026 5 min read
Australians hold just over $1.06 trillion in self-managed super funds, and for all the independence the structure promises, the money is invested with remarkable uniformity. The ATO’s March 2026 quarterly statistics put listed shares at 26% of all SMSF assets and cash and term deposits at another 16%; two asset classes carrying more than 40% of the sector between them, with property prominent in much of the rest. Concentration is not a failing in itself. But it does leave a great deal riding on a small number of markets, and it explains why trustees looking for income and genuine diversification keep arriving at the same shortlist: private credit, unlisted property and infrastructure, and real-asset strategies including agriculture and livestock.
The appeal of these alternatives is straightforward; income, and returns that do not move in step with listed markets. The trade-offs are just as straightforward: typically lower liquidity and less frequent pricing. Whether that trade is right for a particular SMSF is not really a question about the asset class at all. It is a question about the fund’s own obligations, and that is where a trustee’s thinking should start.
The four checks that come before any investment case
Before the merits of any alternative even arise, four things have to line up for an SMSF. The trust deed must permit the investment (most modern deeds are broad, but check). It must fit the fund’s documented investment strategy, because superannuation law requires trustees to consider diversification, liquidity and the ability to pay benefits when due. It must satisfy the sole purpose test. And it must be capable of being valued annually for the fund’s accounts. This makes “how and how often are units priced?” a question to ask any manager before allocating, not after.
The wholesale door
Many alternatives (including the Ferguson Hyams fund) are open to wholesale investors only, so the practical question becomes how an SMSF qualifies. Typically, the trustee meets a wholesale test in one of two ways: the wealth test; net assets of at least $2.5 million, or gross income of $250,000 in each of the last two financial years, evidenced by a qualified accountant’s certificate no more than two years old, or by investing at least $500,000 in the product. The rules around superannuation and wholesale classification have technical edges, and this is one place where a shortcut is not worth it: confirm your position with your accountant or adviser before relying on it.
“Liquidity has to match the fund’s pension and expense obligations, not just the trustee’s preferences.”
Matching the investment to the fund’s obligations
The questions that matter most are the unglamorous ones. How does the fund’s liquidity match my pension and expense obligations? How are assets valued, and will I get what my auditor needs at year end? What income does the strategy target, how is it generated, and what are the key risks? What are all the fees, and who actually operates the underlying assets? A manager with good answers will give them specifically and in writing; treat vagueness on any of these as an answer in itself.
Where livestock strategies sit
Real-asset strategies built on short capital cycles occupy a middle ground on the liquidity spectrum: less liquid than listed funds, considerably more liquid than farmland or unlisted property. Ferguson Hyams’ livestock strategy runs cycles of roughly 100 days with intended quarterly distributions, is SMSF-eligible for wholesale investors, and reports production metrics through the cycle; the kind of reporting cadence that fits an annual audit rather than fighting it.
Frequently asked questions
Can an SMSF invest in agricultural or livestock funds?
Generally, yes, where the trust deed and investment strategy allow it and the trustee meets the fund’s eligibility criteria, typically wholesale investor status for unlisted agricultural funds.
How does an SMSF qualify as a wholesale investor?
Commonly via the wealth test ($2.5m net assets or $250k income for two years, with a qualified accountant’s certificate issued within the last two years) or the $500,000 minimum investment test. The detail is technical, confirm with your accountant.
What percentage of an SMSF should be in alternatives?
There is no fixed rule, superannuation law requires the allocation to fit a documented investment strategy addressing diversification, liquidity and benefit payments. Many trustees work with an adviser to size illiquid allocations.
Sources
Australian Taxation Office, Highlights — SMSF quarterly statistical report, March 2026 (published 16 June 2026): 672,805 SMSFs; total estimated assets $1.06 trillion; listed shares 26% and cash & term deposits 16% of total assets. Wholesale investor tests: Corporations Act 2001 (Cth), ss 708 and 761G and Corporations Regulations 2001.
This article is general information only, prepared without regard to your objectives, financial situation or needs. It is not financial product, legal or tax advice. Ferguson Hyams Investment Management Pty Ltd, AFSL 490023.