Managed funds

Investing can be complex and can sometimes feel overwhelming if you don’t already have an investment portfolio. That’s why managed funds are used by many investors.

Managed funds give you access to a variety of sophisticated investments – some of which aren’t normally available to individual investors – and you can usually start investing with just $1,000.

What is a managed fund?

A managed fund is an investment that pools the money of many individual investors. This money is then invested by a professional fund manager in different asset classes (e.g. shares, property and bonds). How much is invested in each asset class will depend on the fund’s investment goals.

When you invest in a managed fund, you’re allocated a number of ‘units’, making you a ‘unitholder’. Each unit represents an equal amount of the market value of the fund.

During the year the managed fund may earn income in the form of dividends or interest and may benefit from growth in the value of the fund’s investments. It may also make profits on any investments it sells.

What are the benefits?

For many investors, managed funds provide the right amount of control without the time-consuming management required by hands-on investing. The advantages include:

• Suit yourself. You can choose to invest in a fund designed to deliver regular, stable income, or one focused on capital growth. You can take on as much or as little investment risk as you are comfortable with.
• Diversification. Through a managed fund, you can access different fund managers, asset classes, companies, industries, sectors and countries. To achieve this level of diversification on your own, you would need large sums to invest.
• Professional management. By investing in managed funds you can benefit from the fund manager’s expertise, resources and experience. The qualified professionals managing your money have access to information, research and investment processes not readily available to individual investors.
• Access to sophisticated investment products. Investing in a managed fund gives you access to a range of investments that may not be available or affordable to you as an individual investor.

Making the most of your managed fund investment

You can maximise the benefits of investing through a managed fund by:

• Choosing investments you are comfortable with. Make sure you understand what you’re investing in and how much risk is involved. A Commonwealth Financial Planner can help you select investments appropriate to your situation and goals.
• Investing regularly. Many managed funds offer the convenience of a regular savings plan so you can add to your investment on a regular basis. Regular investments can often be deducted straight from your bank account.
• Reinvesting your distributions. Managed funds make it easy to reinvest your investment earnings. Reinvesting any earnings you receive allows you to purchase more units in the fund with no additional cash outlay. This strategy will also help you take advantage of compounding over time.

Choosing the managed fund that’s right for you

There is a lot to consider when choosing a managed fund. If you’d like advice on selecting a managed fund or building an investment portfolio, you can use our online booking form to organise an initial, no-obligation consultation with a Commonwealth Financial Planner.

 

• Important information
  ¹The information contained on this web page is of a factual nature only and is not intended to constitute financial product advice. It has been prepared by Commonwealth Financial Planning Limited without considering your individual objectives, financial situation or needs. You should consider its appropriateness in light of your circumstances and consider seeing professional advice relevant to your individual needs before making a decision based on this information. Commonwealth Financial Planners are Representatives or Authorised Representatives of Commonwealth Financial Planning Limited ABN 65 003 900 169, AFSL 231139, a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.
  ²Investment products are subject to investment risk, including the loss of income and capital invested. Past performance is no indication of future performance.