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Latest in Managed Funds

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Managed Funds - April 11th

Must-read for investors: Award-winning Managed Funds for 2019 revealed

Are you looking to invest your money in a managed investment scheme that offers outstanding value?

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Investor Hub - March 18th

Managed Funds Versus Index Funds

Managed or index funds, which one is better? It’s an often-held debate between investors. And to a certain extent the decision as to which one is “best” will come down to personal preference. That said, it’s always worth looking at some statistics.

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ETFs - October 11th

10 Top Performing Ethical Investment Funds in 2018

Investing your money ethically doesn’t mean that you have to accept low returns. Here are ten strong performing ethical investment managed funds and exchange traded funds, based on their 1-year performance as of August 31, 2018.

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Investor Hub - October 5th

3 Diversified Investment Options For Your Portfolio

Should you go with the tried and true managed fund, the flexibility of an exchange traded fund (ETF) or the new and much talked about managed account?

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ETFs - August 3rd

Active Vs. Passive Investing - What's the Difference?

Here’s a breakdown of how active and passive investors differ in their tactics, tools and attitude towards investing.

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What are managed funds?

A managed fund is an investment where your money is pooled together with other people’s money and is invested in a common investment goal by the fund manager. Managed funds are also known as ‘managed investments’ or ‘managed trusts’, because they are a type of trust where the fund manager holds and controls the money on your behalf.

Managed funds are either listed (traded on the share market) or unlisted (bought and sold directly through the fund manager). Listed funds are valued according to supply and demand, whereas unlisted funds are valued weekly by the fund manager.

Learn more about managed funds and how they work in this article.

How to compare managed funds

To help you compare managed funds and choose between the thousands of managed investment schemes on the market, CANSTAR releases annual star ratings reports about the different categories of managed funds.

Compare managed funds using the comparison tool at the top of this page.

In general, the main things you should consider when comparing managed funds are:

  1. Your risk profile – conservative, balanced, growth, or aggressive/high growth
  2. What type of managed fund you want to invest in – actively managed, passively managed, ethical investment, or bear funds
  3. Asset classes you want your fund to invest in – shares, cash securities, property trusts, fixed interest investments, agriculture or agribusiness schemes, film schemes, timeshare schemes, or mortgage schemes
  4. Fees and costs
  5. The withdrawal process for your exit strategy
  6. Long-term performance

Learn more about what to look for in a managed fund.

 

Written by: TJ Ryan

Managed Funds Glossary Of Terms

Please note that these are a general explanation of the meaning of terms used in relation to managed investment funds. Your provider may use different terms, and you should read your product disclosure statement carefully to understand everything that may apply to your fund. You cannot rely on these terms in relation to any managed fund you may purchase.

  1. Asset allocation: Also known as the asset mix. The way a fund distributes (allocates) your invested money into different asset classes, e.g. ‘100% cash’, or ‘20% shares, 20% bonds, and 60% property’. Assets can be allocated between growth and interest-bearing investments.
  2. Asset class: Also known as an asset sector. A group of securities that have the same characteristics. Asset classes include Australian shares, international shares, property, cash, fixed interest, and private capital investments.
  3. Balanced fund: A fund or portfolio which invests in all major asset classes: cash, fixed interest, property, and shares. This mix can include domestic and/or international assets. A balanced fund provides long-term capital growth and a reasonable level of income, and is a medium risk investment option.
  4. Benchmark: Provides a standard for measuring how a fund manager’s investment has performed long-term compared to a market index such as the All Ordinaries Accumulation Index.
  5. Bond: A type of fixed interest, debt security issued by corporations, governments or government agencies. Someone who owns bonds becomes a creditor of the bond issuer, not a shareholder in the agency.
  6. Capital: The value of an investment in a house or business, represented by total assets less total liabilities.
  7. Capital growth fund: A fund that primarily invests in assets likely to increase in value, such as shares and property.
  8. Capital guaranteed fund: A fund that guarantees a specified return (declared investment return) on top of the original capital.
  9. Contribution: An amount of money that you add to (contribute to) your investment fund. A similar concept to a deposit placed in a bank account. Some managed funds charge a fee for the administration of each contribution you make.
  10. Cost basis: The value of an investment, consisting of the amount of the original investment, any additional incremental investments, capitalised fees, and retained earnings from the investment. This valuation does not take into account any unrealised gains from market valuations.
  11. Diversified option: An option that invests in multiple asset classes (usually more than three).
  12. Growth fund:A managed fund that predominantly invests in growth assets.
  13. Hedge fund:A managed fund where the fund manager is authorised to use derivatives and borrowing with the aim of providing a higher return.
  14. Outperformance or Underperformance: How well a fund has performed, as measured against an index, competitor, or other benchmarks. Outperformance means a managed fund has performed better than the index, competitor, or benchmark. Underperformance means a managed fund has performed worse than the index, competitor, or benchmark.
  15. Securities: Written undertakings to repay money, such as bonds, bills of exchange, promissory notes or share certificates. These are usually negotiable instruments that establish ownership and payment rights.
  16. Socially Responsible Investment (SRI): A type of managed fund or investment that chooses to invest solely in companies that are acting in ways that are socially and environmentally sustainable. SRI funds are becoming popular quickly, and they typically outperform index markets. An SRI fund also has non-financial aims, including attempting to improve working conditions in developing countries, and restoring the environment.
  17. Volatility: A measurement of how much returns vary over time. The volatility of a market directly affects its level of investment risk.
  18. Wholesale fund: A managed fund where individuals pool their money to invest collectively, and distributions are made to investors pre-tax. Investors benefit from getting better diversification than they could achieve as an individual investor, and paying their own rate of tax on the income, which is usually a lower rate than the fund’s company tax rate.