Knowledge Centre

What is a managed fund – and why are they so popular?

7 reasons why managed funds are a popular investment choice  

Around 1.2 million people in Australia have part or all of their investments in managed funds. So why are they so popular?

A managed fund is a professionally managed investment portfolio that you as an individual investor can buy into. The fund pools your money with that of other investors to form an investment fund.

Each managed fund has a specific investment objective, usually based around the different asset classes. Some funds invest in just one type of investment such as Australian shares, international shares, cash or mortgages. Others (known as diversified funds) invest across a range of asset classes including Australian shares, international shares, fixed interest, property securities and cash. 

The money you invest is used to buy assets in line with the investment objective of the specific fund. Specialist investment managers then invest the money on your behalf. 

Here are the top 7 reasons why managed funds are a popular choice for Australian investors.

1) It's easy to diversify your investments

When you invest in a managed fund, you are allocated a number of 'units’, invested across different asset classes, companies, industries, sectors and countries.

The value of your units is calculated on a daily basis and changes as the market value of the assets in the fund rises and falls.

Don't wait to get started "some day"

2) Experts manage your money

Managed investments give you access to trained investment specialists, who constantly research and monitor the investment markets to determine the best possible investment opportunities.

These qualified investment professionals have access to information, research and robust investment processes that are not easily available to you as an individual.

3) It's easy to set up a regular investment plan

With a managed fund you can choose to invest small monthly amounts and transfer your payments on the day you get paid – a strategy also known as 'pay yourself first'. 

4) You can invest for income, growth, or both

The returns you get from a managed fund usually come in two forms: income (paid to you as a 'distribution') and capital growth (achieved only when the unit price increases in value).

5) You can start investing with as little as $1,000

Investing in a range of shares or a property often requires large sums of money, and sometimes a large loan.

Managed funds are different: they allow you to access certain investments at a fraction of the usual cost. This is because you share these costs with other members of the fund rather than having to pay the minimum investment fee on your own. 

So whether you have $2,000, $20,000 or $200,000 to invest, your money has access to the investment buying power of millions of dollars. This buying power means you can take advantage of opportunities that are normally only available to large corporations, or those with extensive specialist knowledge. 

6) A more efficient and convenient way to invest

Managed investments offer investors a convenient and efficient method of investing. When you invest, your fund manager will handle all the paperwork and administration, provide you with regular information on the fund’s performance, and supply annual tax statements and tax guides.

7) Less admin, more diversity than direct investments

While it’s possible for you to invest directly in nearly all asset classes, managed funds can provide you with a more diverse range of investment opportunities – while also taking the effort out of the necessary administration associated with many investments.

Meeting with a HM financial adviser

Talk to us for advice on managed funds

If you’re unsure whether investing in a managed fund is the right move for your situation, Henderson Matusch can help. Our qualified financial advisers will talk to you about your financial goals, and how we can help you achieve them.  

To talk to a Henderson Matusch financial expert about your needs, simply call us on (07) 3229 3688 or fill out the simple contact form here.

Topics: financial planning

Posted by Henderson Matusch on Jun 12, 2018 9:48:09 AM
Don't wait to get started "some day"

Recent Posts