Managed Investments

Managed Investments

Managed investments include unit trusts, master trusts, wrap accounts, superannuation funds, allocated pensions and insurance bonds. Depending on the particular fund, they might invest in shares, property, cash or fixed interest – or a specific combination of those assets.

When you invest in a managed investment (often called a managed fund), you are typically allocated a number of units based on how much you invest and the current price per unit. If you invest $10,000 and the unit price at the time is $1, you would own 10,000 units.

Managed investments have become very popular with Australian investors because of four main reasons:

Expert management

Fund managers employ teams of investment analysts and portfolio managers. Their job is to constantly research investments markets in order to determine which assets should outperform. They then buy those assets on your behalf, and monitor them closely to ensure they perform as expected. Underperforming assets are sold and replaced with assets of superior potential.

Broad diversification

Diversification is the proven strategy investors use to minimise the risk of losing capital and the risk of fluctuating investment returns. Through a managed investment this risk can be minimised, as the investment will not only give you exposure to a larger number of companies, but also a wider array of industries and markets.

Convenience

Using managed investments will save you much time and effort. The fund manager does all the research for you. They buy and sell the securities on your behalf. They ensure that you get adequate diversification. And then they look after the paper work and send you regular reports. In addition, you can usually withdraw some or all of your money from a managed fund at short notice.