Managed Funds - July 18th
According to the most recent annual report from the Responsible Investment Association Australasia (RIAA), Responsible investment assets form an impressive portion of the country's investment industry, now representing 47% of Australia’s professionally managed assets, with those …– Read more
Managed Funds - July 11th
So you've got yourself some money to put aside and you want to make it grow. What are your options? Generally, you could generate returns in any of the four different groups of investments known …– Read more
Managed Funds - June 3rd
Just as performance can differ greatly from fund to fund, so can the fees that are charged. Small differences in price can make a big difference to the cost you pay as you build up your …– Read more
Managed Funds - June 3rd
In 2016, CANSTAR has once again researched and rated Managed Funds (a.k.a. Managed Investments). Our research included 65 products. We assess managed funds in 4 different categories: Multi-Sector Aggressive Multi-Sector Balanced Multi-Sector Growth Multi-Sector Moderate We look at what each category …– Read more
A managed investment involves pooling together money from different investors towards a common investment goal. The pooled money is then invested by a professional investment manager in different asset classes that align with the pool’s investment objectives and the investors’ risk profile.
Managed investments cover a variety of asset classes including:
When you invest in a managed fund, you are allocated a number of ‘units’. The value of your units is calculated on a daily basis and changes as the market value of the assets in the funds rises and falls.
Managed funds have low minimum requirements on the investment amount, and you can also sign up for a regular investment plan. This carried the benefit of the investing power of millions traded by experts in this field.
The question is how do investors choose which managed fund to trust with growing their wealth? The CANSTAR managed investments ratings have been designed to assist small investors find a fund that best suits their needs and allows them to gain exposure to markets locally and around the world.
Managed funds are appealing to many different investors, from young investors starting on their wealth accumulation journey, to everyday “Mum and Dad” investors looking to supplement their income, to seasoned investors looking to diversify their asset classes to mitigate risk.
CANSTAR rates managed investment funds according to the value they provide and how well they perform for three different profiles of investor:
Investors should also consider their stance on ethical or responsible investment. Are you worried about what companies your fund invests in on your behalf? Choosing ethical investments is a growing trend, with more investors wanting to make sure their money is not funding activities that go against their personal values. Ethical investment funds can “screen in” companies that actively invest in sustainable activities like healthcare or green energy, and “screen out” companies that invest in world-damaging activities like coal seam gas, tobacco production, slave labour, or forest logging.
One of the main factors in terms of value for money is how much it costs to make an investment purchase or sale. These can take a significant chunk out of any returns your managed investment makes, so you’ll need to know what fees you’re paying to get outstanding value for money.
The costs involved in a managed investment include:
The features that CANSTAR assesses in determining value ratings include things such as:
Past performance gives no prediction of future performance, but long-term performance is still worth considering. It’s best to look at how a fund has performed over the past 5-7 years rather than the past 1-3 years, so that you can see how reliable and consistent the fund is in providing a return.
CANSTAR ratings do not include a measure for investment returns, but we do review the fund’s performance over the past 5 years for signs of consistent underperformance.
Andrew has been regularly saving into an account that has accumulated a little over $40,000. He doesn’t need the money in the short-term, so he is interested in trying to achieve higher returns through the stock market.
Andrew has retired and is looking for an easy-to-manage investment that will provide an income stream to supplement his superannuation. He should look for a managed investment that does not charge performance fees and has low fees generally, so that his income distributions are not eaten up by fees.
Having spent most of his working life as an environmental lawyer, Andrew wants to make sure his investment manager won’t invest his funds in a company that supports deforestation and logging activities. He should look for a managed investment fund with a strong focus on ethical investment.
Using the CANSTAR website, Andrew compares managed investment funds and checks the MER% fees and performance fees charged by a few ethical investment options. He chooses one that offers regular monthly distributions and considers his personal financial situation carefully before signing up.