Managed Funds

For many years managed funds have been used by thousands of investors as a base for wealth creation. The benefit of managed funds to investors is they gain the services of a professional fund manager who collects and pools investor’s money and invests it in a particular market in which the fund is specialising. Through pooling, the small investor gains entry to financial markets that would otherwise be out of reach. Managed funds can provide tax rebates through dividend imputation and tax-free income from depreciation allowances.  

Funds can be invested in a wide range of investments offering plenty of diversification. Investments may include Australian and International shares, fixed income investments, cash and property. Funds may specialize in a particular sector or in a number of sectors. Each pool is invested in accordance with the investment policy of the relevant fund. An investor can make a single investment even though the funds are spread across a variety of assets and have access to major financial markets. Investors are allocated a number of “units” which represents their holding in a particular fund. When additional money is invested or income is generated by the fund more units are purchased. As the number of units grow and the unit price increases, the value of the fund rises.

As an investor, you share in the increase or decrease of the value of the fund that you are invested in. As the underlying assets of each fund are subject to market conditions and fluctuations, the value of the units can rise or fall depending on the performance of the assets in the fund chosen.

Since the 1990’s the managed funds industry has experienced enormous growth which has led to a wide range of managed fund options available to small and large investors. The growth of superannuation funds in recent years has been another reason why there has been outstanding growth in the managed funds market.