Managed investments involve entrusting your funds to experts which comes with potential rewards and risks. Understanding these complexities is crucial in making investment choices that meet your financial objectives.
What is it?
Managed investments are where many investors pool their resources in order to access a broader range of investments and benefit from professional investment management at a lower cost and risk to them individually than if they tried to go it alone.
There are a large number of funds to choose from, some offering a mix of investments and some focus on a particular class of asset, such as shares. Some may even focus on a specific market sector, such as banks or technology companies.
Managed investments include managed funds, Australian Real Estate Investment Trusts (A-REITs), and exchange traded funds (ETFs).
How do you invest?
You can invest directly with a fund managers by completing an online or paper application and transferring money to the fund.
ETFs, A-REITs and some managed funds (mFunds) are traded on the ASX.
If you need help choosing an investment, consider using a stock broker or financial adviser.
To invest directly with a fund, visit their website for information on how to invest.
For ETFs, you will need a share trading account, also known as a broking account, or you may choose to use a stock broker or financial adviser to make the trades for you.
Where to get more information
- Know why you are investing. Are you looking for additional income from investing returns, or are you focused on capital growth? Your choice of investment should be based on your individual needs
- You will pay a brokerage fee every time you buy or sell units in a fund via the ASX so it’s not cost effective to make small trades often
- Direct managed fund investments often allow you to make regular contributions to the investment, which may be useful for regular savers, however the fees are usually a bit higher
- ETFs and managed funds make it easier to invest in global companies and industries not represented on the Australian market
- Read the Product Disclosure Statement (PDS) carefully to make sure you understand what the fund invests in, the fees, terms and conditions, and key features of the fund