Managed funds

Investing in managed funds gives you access to many different types of investments, some of which are not normally available to individual investors. The minimum investment amount is generally $1,000.

What is a managed fund?

Managed funds pool 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) in line with the managed fund’s stated investment objectives.

When you invest in a managed fund, you are allocated a number of ‘units’, rather than shares. Each unit represents an equal portion of the market value of the portfolio of investments. Each unit has a dollar value, known as the ‘unit price’.

During the year the fund will earn income in the form of dividends (share or property funds) or interest (bonds or cash funds). It may also make profits on investments sold. The fund must pay all this income and realised capital gains to unitholders as ‘distributions’.

Why invest in a managed fund?

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

• Access to sophisticated investments. Investing in a managed fund gives you access to a range of investments that may not ordinarily be available or affordable to you as a single investor.
• Experience of a fund manager. By investing in managed funds you can benefit from a fund manager’s expertise, resources and experience. This means you can spend less time managing your investments, and you also gain peace of mind knowing that your money is in experienced hands.
• Diversification. Through managed funds, you can access different fund managers, asset classes, companies, industries, sectors and countries. To achieve this level of diversification when investing directly, you would need large sums.
• Your money is managed by experts. The qualified investment professionals managing your money have access to information, research and investment processes not readily available to individuals.
• Select your investment style. You can choose whether to invest in a managed fund designed to deliver income, or one focused on capital growth.
• Regular savings plans. 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.
• Distribution reinvestment. Managed funds make it easy to reinvest your investment earnings. This allows you to purchase more units with no additional cash outlay and take advantage of compounding over time.

How do you choose the managed fund that’s right for you?

To help choose the managed funds that suit you best, consider the following questions:

• How much risk are you comfortable with?
• What is your investment time frame?
• What are your objectives – are you focused on returns or capital growth?
• What types of sectors or asset classes do you want to invest in?

You should also consider the fund’s management style, the experience of the fund manager and the objectives of the fund. A financial planner can help you select the managed fund that’s right for you.

Ready to invest now?

If you’re ready to invest, you may want to consider a Colonial First State product. The Colonial First State Group is one of Australia’s leading wealth management providers, with more than $140 billion in funds under management and administration globally.

Colonial First State provides investment, superannuation and retirement products to individuals as well as to corporate and superannuation fund investors. Colonial First State’s FirstChoice platform offers more than 100 investment options. Some of these are managed by Colonial First State, and others by well-known investment managers and specialist boutique managers. Colonial First State offers the choice of retail and wholesale investment products.

Managed funds can be complex, but Commonwealth Financial Planners are dedicated to making them simple to understand. If you would like to find out more about managed funds, why not arrange an appointment with a Commonwealth Financial Planner? Simply phone 1800 241 996 or complete an appointment form. 

• Important information. The 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.
• Investment products are subject to investment risk, including the loss of income and capital invested. Past performance is no indication of future performance.
• Colonial First State Managed Investment Funds, FirstChoice Investments, and FirstChoice Wholesale Investments are issued by Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468. Product Disclosure Statements (PDSs) describing the products are available by contacting Investor Services on 13 13 36. You should consider the relevant PDS before making a decision about the product. The responsible entity, Colonial First State Investments Limited, receives fees.
• 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.