A limited recourse borrowing arrangement (LRBA) is a type of borrowing that can be used by a Self-Managed Superannuation Fund (SMSF) to purchase an asset, typically a property, without putting the fund's other assets at risk.

Under an LRBA, the SMSF can borrow money to acquire an asset, but the lender's recourse is limited only to that asset in the event of default. This means that if the SMSF defaults on the loan, the lender cannot access the fund's other assets to recover the outstanding amount.

LRBAs are subject to specific rules and restrictions set out in the Superannuation Industry (Supervision) Act 1993 (SIS Act), including limits on the amount of borrowing that can be used, and the requirement that the borrowed funds must be used to acquire a single asset, such as a property, and not to finance general investments or expenses.

LRBAs can provide SMSF trustees with greater flexibility to acquire assets that may be out of reach without borrowing, and potentially provide higher returns over the long term. However, they also come with additional risks, such as interest rate risk and the risk of the asset underperforming or not generating sufficient income to cover the loan repayments.
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It's important to note that LRBAs are a complex financial product and not suitable for all SMSF trustees. It's important to seek professional advice from a qualified financial advisor or accountant before considering an LRBA as part of your SMSF investment strategy.

 

A multi-strategy income fund is a type of investment fund that seeks to generate income through a variety of investment strategies. These funds typically invest in a diversified portfolio of income-generating assets, such as bonds, dividend-paying stocks, real estate investment trusts (REITs), and other income-oriented securities.

The goal of a multi-strategy income fund is to provide investors with a steady stream of income, typically in the form of regular distributions, while also seeking to generate capital appreciation over the long term. By investing in a variety of income-producing assets, the fund can help to reduce the overall risk of the portfolio, while also providing exposure to a range of different investment opportunities.

In addition to traditional income-generating assets, some multi-strategy income funds may also use more complex investment strategies, such as options trading or credit strategies, to generate additional income or to hedge against market volatility.
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Overall, multi-strategy income funds can be a useful option for investors seeking a diversified, income-generating portfolio with the potential for capital appreciation, but it's important to carefully evaluate the fund's investment objectives, strategies, fees, and risks before investing.