Managed funds
Access a range of asset classes and market sectors through a single managed fund transaction.
Managed funds are professionally managed pools of funds invested in various asset classes including shares, property and cash. You can purchase units in these funds, and the value of these units changes depending on the value of the fund as a whole.
Minimum initial investments generally range from $1,000 to $5,000, dependent on the specific fund. For full details, you need to refer to the product disclosure statement (PDS) and other disclosure documents issued by each fund manager.
Types of managed funds
Managed funds encompass a diverse array of investment vehicles, designed to meet various risk tolerances and financial objectives. These options may cater to investors seeking hands-on management or those preferring a more passive approach.
Passive Investment Approaches
Certain managed funds adopt a more hands-off strategy, seeking to mirror rather than outperform market indices. This approach typically incurs lower fees due to their less intensive management requirements. For more information, you might explore resources on Australian index-tracking investments.
Active Investment Approaches
Some managed funds employ a dynamic approach, aiming to surpass specific market benchmarks like the S&P/ASX 200 in Australia. Fund administrators utilise an array of techniques, including market analysis, economic indicators, and company evaluations to guide their investment decisions. While these strategies may offer enhanced return potential, they often come with increased costs.
Strategies
Focused Investments
These managed funds concentrate on particular industries, regions, or investment philosophies. They might target sectors such as tech or healthcare, geographic areas like emerging economies, or align with specific ethical considerations.
Diversified Portfolios
These managed funds aim for equilibrium, distributing investments across various asset classes including stocks, bonds, and real estate to mitigate risk and pursue consistent returns.
Past performance is not an indication of future performance
Risks
Each managed fund will have different risks based on the assets they invest in. Information on the risks of investing in a managed fund can be found in the PDS and other disclosure documents.
Fees
There are a range of fees that may be charged by managed funds. Not all funds will charge all of these fees, and the amounts can vary significantly between different funds Some common fees include:
Establishment fees: one-time fees charged to open your investment.
Management fees and costs: ongoing fees and costs for managing your investment.
Contribution fees: These fees are applied when you add money to your investment in the fund.
Performance fees: Additional fees that may be charged if the fund exceeds the target return or benchmark.