Yes — SMSFs can invest in exchange-traded funds (ETFs), managed funds, and listed investment companies (LICs), and these are among the most popular investment choices for SMSF trustees. They offer diversification, low fees, and ease of management, all of which align well with the legal requirement to have a diversified investment strategy.
However, any investment must be consistent with the fund’s investment strategy and meet the sole purpose test. Trustees should ensure that investments are made and held in the name of the SMSF (not personally), and that any income and capital gains are properly recorded in the fund’s accounts.