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Understanding Managed Funds 

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What is a Managed Fund?

A managed fund is an investment that pools money from multiple investors into a single portfolio. The fund is managed according to a defined investment strategy by an investment manager, who is responsible for managing and monitoring the fund's investments on behalf of investors.

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Managed funds can invest in a range of asset classes and investment sectors, with each fund designed to meet a specific investment objective. Each fund will have its own investment strategy, risks and investment timeframe.. Before investing, it's important to understand how a fund invests, its objectives, risks and investment timeframe.

Types of Managed Funds

Managed funds are available across a range of investment strategies and asset classes. Some funds invest in a single asset class, while others invest across multiple asset classes to achieve a specific investment objective.
 

Examples of managed funds include:

  • Australian and international share funds

  • Property funds

  • Fixed income funds

  • Multi-asset or diversified funds

  • Cash funds
     

Each fund will have its own investment objective, strategy, timeframe and level of risk.

Different Ways to Invest in Managed Funds

OUR APPROACH

While their structure and the way they are accessed can differ, investors generally hold an interest in the fund rather than owning the underlying investments directly.

Please note
This article has been prepared by Selfund for general information and education purposes only.
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It has been prepared without taking into account your individual objectives, financial situation or needs. Before making any investment decision, you should consider whether the information is appropriate for your circumstances and seek independent professional advice where appropriate.

Managed funds can be structured and accessed in different ways. Some managed funds are offered directly by an investment manager, where investors apply to the fund and their investment is managed in accordance with the fund's investment strategy.
 

Others are traded on an exchange, such as the Australian Securities Exchange (ASX). Exchange Traded Funds (ETFs), for example, are a type of managed fund that can be bought and sold on an exchange in a similar way to shares.
 

You may also come across that managed funds take different forms and structures. Terms you may come across include:

  • Managed investment schemes

  • Unit trusts

  • Corporate Collective Investment Vehicles (CCIVs)

  • Exchange Traded Funds (ETFs)

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Key Considerations

Like any investment, managed funds carry risks and returns are not guaranteed.
Before investing, it's important to understand:
 

  • The fund's investment strategy.

  • The risks associated with the investment.

  • Fees and costs.

  • The investment timeframe.

  • How distributions and unit prices operate.
     

Reading the fund's disclosure documents provide further information about its investment strategy, risks, fees and costs, and how the fund operates.

Benefits of a Managed Fund

  • Access to professional investment management.

  • Exposure to a diversified portfolio through a single investment.

  • Access to a range of investments through a single fund.

  • Ongoing management of the portfolio in line with the fund's investment strategy.

  • A range of investment strategies to suit different investment objectives.

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