DIY super funds can borrow, in a fashion

In theory, self-managed superannuation funds cannot borrow. But there are ways to do so. One is to invest in managed funds that take out leverage. The second is to invest in warrants. While most investors may choose to pre-pay interest prior to the end of the financial year, this is not a sound strategy for self-manager superannuation funds. Interest paid on a leveraged investment is deductible, but not until the interest is paid. This means the best time for DIY funds to invest in instalment warrants is at the start of the financial year.