What is an mFund?

23 March 2017
Are you weighted too heavily toward a particular sector or stock, and want to get smart about diversifying your investment portfolio? Do you want to expand your reach into the local Australian or global markets? Would you like a percentage of your portfolio to be managed by a professional fund manager?

If you answered yes to some or all of these questions, read on to find out more about how you can gain access to mFunds through a broker.

What is an mFund?

An mFund is an unlisted managed fund available to investors through the mFund Settlement Service under the ASX Operating Rules.

Since the launch of the ASX mFund Settlement Service, Australian investors have begun to recognise the powerful mix of benefits that the inclusion of mFunds into portfolios can provide:

  • Diversification through access to different asset classes, companies, industries, sectors and countries
  • Professional management – your money is managed by a qualified investment professional
  • Exposure to assets not easily reached using traditional investment vehicles, such as listed companies
  • Access to international and emerging markets, property funds and bond markets

mFunds offer Australian investors wide exposure to a range of asset classes and investment themes not easily reached in the local market.

According to the ASX, some of the most successful mFunds are returning 22.21% per annum over a 5-year investment timeframe, by giving Australian investors access to different asset classes.

They are also an effective means of diversifying investor’s portfolios, reducing sector or asset class risk.

How does the mFund settlement service work?

The mFund settlement service uses the ASX CHESS service to automate the buying and selling of units in unlisted managed funds via select brokers.

It’s a growing service, with 170 mFunds available from a broad range of leading managed fund issuers across multiple asset classes and sectors (ASX).

Units purchased through mFunds are delivered directly back into your CHESS sponsored HIN Holding.

Quick and easy to buy mFunds

mFunds are purchased online through your stockbroker.

mFunds typically provide an automated, convenient, consolidated view of an investor’s portfolio, so they can keep track of their portfolio’s total value.

Source: canstar

SMSFs can benefit from mFunds

More than ever, trustees of SMSFs need access to investment product structures and decision-making tools. They need the best return on their capital, without the headaches and costs associated with traditional means of accessing these products via paper applications or through a bank-owned wrap platform.

While many investors tend to use an ‘income strategy’ focussing on dividends and franking credits, other SMSF trustees may want to build a portfolio that ensures growth. mFunds can provide one avenue to achieve growth.

Australian SMSF trustees are especially attracted to the benefits of mFunds, which are seeking to add another hard-working element to their share portfolios.

The SMSF segment now comprises $653.8 billion in assets managed by 585,260 SMSF trustees (as of December 2016).

The future of mFunds

At the time of writing, there are over 170 mFunds on the ASX, from a large selection of fund managers such as Aberdeen, AMP, CMC Markets, and Pimco. The number of managed funds operating within the mFund offering is expected to grow significantly in 2017, according to commentators.

Invest smarter with our latest star ratings report on managed funds:

Or compare managed funds on our website:

Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise. The results are general advice only and not personal product advice. If you look at any specific product, consider the product disclosure statement and seek advice from a licensed financial adviser before making an investment decision. See our detailed disclosure. Click here for additional important notes and liability disclaimer.

Canstar is an information provider and in giving you product information and is not making any suggestion or recommendation about a particular product. The information has been prepared without taking into account your individual investment objectives, financial circumstances or needs. Before you decide whether or not to acquire a particular financial product you should assess whether it is appropriate for you in the light of your own personal circumstances, having regard to your own objectives, financial situation and needs. You may wish to obtain financial advice from a suitably qualified adviser before making any decision to acquire a financial product. Please refer to Canstar’s Financial Services and Credit Guide (FSCG) for more information, and read our detailed disclosure, important notes, and additional information.

The inclusions mentioned represent a selection of what is covered at the time of writing. Additional terms and conditions may apply to different features. Additional fees may apply to the product. Please ensure that you read the product disclosure statement to determine all the current options and inclusions for the product you are considering.

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