24 Mar

Self-managed super funds and pink diamonds investment: What you need to know

Please note, the following information is a guideline only, and does not represent financial advice. Be sure to consult your SMSF advisors and/or do your own research so as to fully understand the requirements and obligations.

Table Of Contents

diamonds in smsfs

Pink diamonds for SMSF investors

More and more Australians are opting to take personal control of their retirement savings with a self-managed super fund, instead of entrusting a financial institution to make stock and bond investments on their behalf through a traditional Superannuation account.

With a SMSF, investors are able to diversify their investment portfolio to include property and commodities such as gold and rare-coloured diamonds.

Today, there are over a million SMSFs, collectively having more than $600 billion collectively in investable funds.

What is a self-managed super fund?

A self-managed super fund (SMSF) is a superannuation trust that is different from other super funds, because its members also fill in the role of trustees.

A SMSF can have one to four members, and its main benefit is the degree of control trustees have when constructing the fund, with the flexibility to select investment opportunities to suit their individual preferences.

As the trustee of a self-managed superannuation fund, you are responsible for making investment choices and ensuring that an investment strategy is followed for the fund.

You are also held accountable that any investments you make are in the best financial interests of the fund, with strict regulations to follow such as keeping records, providing financial statements and filing a tax return, as well as ensuring independent audits are conducted.

How does a self-managed super fund work?

The purpose of a self-managed super fund (SMSF) is to provide members with financial support for their retirement or for their beneficiaries in the event of their passing.

It has a separate bank account, Australian Business Number (ABN), and Tax File Number (TFN) for activities including taking contributions, transferring money, investing, and disbursing lump payments and pensions.

A SMSF is required to have a trustee(s) and the trustees have complete authority over all investments made by the SMSF in the name of the fund.

There are two trustee structures available. The first choice is a corporate trustee, in which each member is a director of the corporation functioning as the trustee. This offers advantages in administration and the flexibility to change membership, while simplifying the recording and registering of assets.

An individual trustee is the other alternative, where each member is chosen to serve as a trustee and at least two trustees are required.

How to Invest in pink diamonds with a SMSF


Australian-mined pink diamonds are fast-becoming a popular choice for SMSF investors.

Due to their stable price growth and low volatility, a SMSF can invest in pink diamonds similarly to gold, art and other collectables, as long as they are bought with funds from an account held in the SMSF’s name, at market rates from a separate third-party source.

As with all assets held in your SMSF, there are a number of administration and compliance responsibilities for Trustees who choose to invest in pink diamonds.

These include:

  • Storage: The diamonds may not be displayed or stored in your home, nor the home of any related party of the SMSF
  • Insurance: SMSF trustees must ensure the diamonds are insured in the name of the fund within 7 days of acquisition
  • Valuation: Valuations must be performed on a regular basis by a qualified independent valuer
  • Sales: Diamonds can be sold to a related party provided the sale is at a market price
  • Usage: Diamonds are not to be used by any related party of the SMSF (so you can’t wear them for fun!)
  • Leasing: You may not lease any diamonds in your portfolio to any related party of the SMSF.

Australian Diamond Portfolio makes buying and storing diamonds for your SMSF easy.

Find out more about how we can assist when investing as an SMSF.



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