Compare Managed Funds

What are managed funds?

A managed fund is an investment where your money is pooled together with other investors in a fund with a common goal. They are usually overseen by the fund manager who 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 daily according to their price on the relevant stock exchange, whereas unlisted funds are usually valued less frequently based on the value of the underlying assets held by the fund.

A managed fund can be invested in a number of areas on your behalf, such as in cash, shares, bonds, listed property trusts or some other security.

It’s important to note that when you invest in a managed fund, you don’t own any of the underlying investments. The Australian Government’s Moneysmart website says you only own units in the fund, which you can buy or sell similar to shares.

The value of the units may rise and fall with the value of the underlying assets in the managed fund. Some managed funds also pay income or ‘distributions’, similar to a company paying dividends to shareholders.

How much does it cost to invest in a managed fund?

Managed funds may charge a number of fees, such as for ongoing management or administration costs, performance fees if the fund performs above a set benchmark, or other fees involved when you buy or sell units in a fund.

The fees may vary between individual managed funds and providers. If you are considering investing in a managed fund it’s important to check the product disclosure statement (PDS) or other documentation to see what fees are charged.

Moneysmart points out that small differences in fees can have a big impact on the returns from a managed fund.

What are the pros and cons of investing in a managed fund?

A managed fund can give you access to a range of companies or investments in a particular area that may be of interest to you.

It could be a managed fund that is actively managed by a manager or team who make ongoing decisions about a fund’s investments, or one that is passively managed that follows a particular market index.

For example, you may want to invest in a managed fund that invests in some of the larger Australian companies by market capitalisation listed on the ASX, or you may want to look at just emerging companies, tech stocks or companies with a strong ethical commitment.

You may opt for a managed fund that invests in cash securities, property trusts, fixed interest investments, agriculture or agribusiness schemes, mortgage schemes or some other sector.

Or you may want to look at a managed fund that invests in overseas markets, or consider a fund that combines a range of options with a mixed and diverse portfolio.

The point being there are many different options available to you at many different levels of risk, from conservative to balanced, growth or high growth. If you are considering investing in a managed fund you need to find one that suits your needs and risk appetite.

Remember, when looking at a managed fund’s performance, past performance is no guarantee on future performance. The value of units in a fund can rise or fall, depending on what happens to the underlying assets.

Moneysmart says you could lose some or all of the money you invest in a managed fund.

You should check what minimum or ongoing investment rules apply, and any fees and restrictions if you wish to sell your units and withdraw your money from a managed fund.

If you are considering investing in a managed fund you may wish to consider seeking some independent professional advice before making any decision.

How do Canstar’s Managed Funds Star Ratings and Awards work?

Canstar’s Managed Funds Awards recognise providers that perform well across a variety of different asset classes and profiles for managed funds, as well as individual awards for providers that offer outstanding value across Multi-Sector Funds and Australian Equities.

Our Managed Fund Star Ratings highlight a shortlist of products from our database that have been assessed and ranked, with the top 10% of funds receiving a 5-Star Rating and an Award in recognition of their performance.

Our Managed Funds Provider of the Year Awards recognise institutions whose products offer a strong combination of performance and features across a variety of asset classes and investor types