MANAGED FUNDS
Summary
TLDRA managed fund pools money from investors to invest in a diversified portfolio managed by a professional. It offers benefits like professional management, access to a broad range of assets, and ease of investment with minimal capital. It's suitable for various risk profiles, from conservative to high-risk growth funds. While it provides convenience and regular updates, it lacks individual control over investment decisions and involves management fees. Choosing the right fund requires consideration of personal investment goals and can be facilitated by financial advisors, making managed funds an ideal starting point for new investors to learn and grow their investment skills.
Takeaways
- đŒ A managed fund pools money from multiple investors to invest in a variety of assets such as shares, fixed interest, property, etc.
- đ Your investment in a managed fund is represented by units, and the value of these units fluctuates based on the performance of the underlying assets.
- đ There is a vast array of managed funds available, catering to different asset classes, geographies, and investment strategies.
- đ Investors can choose funds based on their risk tolerance, from conservative to high-risk growth funds, aligning with their investment profiles.
- đ° The advantage of managed funds includes professional management, allowing investors to access a diversified portfolio with a relatively small initial investment.
- đ Managed funds offer convenience with administration and tax matters handled, and they provide regular reporting to keep investors informed.
- đ« A key disadvantage is the lack of control over individual investment decisions, as the fund manager makes choices on behalf of all investors.
- đ” There is an annual management fee associated with managed funds, which is a cost for the professional management service.
- đ Returns from managed funds are not guaranteed, and it's important for investors to understand the risks involved.
- đ€ For first-time investors, managed funds can serve as an introduction to investing, potentially building confidence to make individual investments in the future.
Q & A
What is a managed fund?
-A managed fund is an investment where your money is pooled with other investors and invested in various assets such as shares, fixed interest, property, etc., by a fund manager on your behalf.
How do you receive units in a managed fund?
-When you invest in a managed fund, you receive units in that fund at a certain price, and the number of units you hold does not change unless you add more money or withdraw some.
What factors affect the unit price in a managed fund?
-The unit price in a managed fund fluctuates daily based on the value of the underlying assets in which the fund is invested.
What types of assets can a managed fund invest in?
-A managed fund can invest in any asset class, including shares, fixed interest, property, and others, and can be tailored to specific geographies or economies.
Why might an investor choose a managed fund over individual investments?
-Investors might choose managed funds for the professional management, access to a diversified portfolio with a small amount of money, and the ease of administration and tax handling.
What are the advantages of managed funds for new or first-time investors?
-Managed funds are advantageous for new investors as they are managed on their behalf, allowing access to a diversified portfolio with a small initial investment, and include administrative and tax services.
How does the risk profile of an investor influence their choice of managed fund?
-Investors can choose managed funds based on their risk profile, with options ranging from conservative to high-risk or growth funds that invest in assets like shares and property.
What are the disadvantages of investing in a managed fund?
-The disadvantages include a lack of control over individual investment decisions and the annual management fees charged by the fund manager.
How can an investor choose the best managed fund for their needs?
-Investors can consult with a financial advisor or contact fund managers directly to discuss options based on their risk profile, investment time frame, and personal circumstances.
What is the process for investing in a managed fund?
-The process for investing in a managed fund is straightforward, involving filling out a form, and can be done by contacting a financial advisor or fund manager.
How can managed funds serve as an introduction to investing for some individuals?
-Managed funds can serve as an on-ramp to investing, allowing individuals to learn and gain confidence through a managed approach before venturing into individual investments.
Outlines
đŒ Understanding Managed Funds
A managed fund is an investment vehicle pooling money from various investors to invest in a diversified portfolio managed by a professional fund manager. Investors receive units in the fund, and the value of these units fluctuates based on the performance of the underlying assets. Managed funds offer a wide array of choices, allowing investors to select funds based on asset types, geographical focus, or risk profiles. They are advantageous for new investors as they require minimal effort in managing and provide access to a diversified portfolio with a small initial investment. Additionally, managed funds handle administrative and tax matters, offering regular reporting to keep investors informed. However, they come with a management fee and lack the personal control over investment decisions that individual investing allows.
đ The Role of Managed Funds in Investment Learning
Managed funds serve as an accessible entry point for new investors, allowing them to gain exposure to a broad range of assets and learn about investing without the complexities of individual stock picking. As investors become more comfortable and knowledgeable through their managed fund experiences, they may gain the confidence to venture into direct investments. This approach allows them to 'learn while they earn,' gradually building their investment skills and portfolio. For further insights, the video encourages viewers to explore additional resources provided through the mentioned links.
Mindmap
Keywords
đĄManaged Fund
đĄInvestment
đĄFund Manager
đĄUnits
đĄAsset Class
đĄRisk Profile
đĄDiversification
đĄAnnual Management Fee
đĄFinancial Advisor
đĄInvestment Journey
Highlights
A managed fund pools money from multiple investors to invest in various assets like shares, fixed interest, or property.
Investors in a managed fund receive units whose number changes only with additional investments or withdrawals.
The unit price fluctuates daily based on the value of the underlying assets.
There's a wide range of managed funds catering to different asset classes, geographies, and economies.
Investors can choose funds based on specific asset types or a mix of assets.
Managed funds are suitable for various investment profiles, from conservative to high-risk growth funds.
For new or first-time investors, managed funds offer the advantage of professional management without the need to make individual investment decisions.
With a small amount of money, investors can access a diversified portfolio of assets through managed funds.
All administrative and tax tasks are handled by the fund, simplifying the investment process.
Investors receive regular reports, staying informed about their investment's performance.
The main disadvantage is the lack of control over individual investment decisions as the fund is managed on behalf of all investors.
Fund managers charge an annual management fee for their services.
Investing in a managed fund is straightforward, with the challenge being the selection of the most suitable fund and fund manager.
Financial advisors or fund managers can guide investors in choosing the right fund based on their risk profile, investment time frame, and personal circumstances.
Managed funds serve as an on-ramp for investors, allowing them to learn and gain confidence to make individual investments in the future.
Investors can use managed funds to learn while they earn and develop the courage to venture into individual investments.
Transcripts
[Music]
a manag fund is an investment where
where your money is pulled with other
investors and invested in a fund that
then invests in in assets be it's shares
or fixed interest or property or
whatever um that's managed by a fund
manager on your behalf and so when you
invest in a in a managed fund you
receive units in that fund at a certain
price and the number of units doesn't
change unless you put more in or or take
some money out but what does change is
the unit price and the unit price will
go up or down every day depending on the
value of the underlying
assets there is literally a a manage
fund for every asset class for every
geography every economy so uh you can
choose from a wide range of of managed
funds you can have very specific funds
such as you could choose to invest just
in a fund that invests New Zealand
shares or you can have a fund that
invests in shares and fixed interest and
property and cash and and all sorts um
so you can you can either base your
choice on the asset type so shares or
fixed interest or property or you can
have a um a managed fund that that
covers an a range of assets so you can
and that's really to suit your own
investment profile so if you're a lower
risk investor you can choose a
conservative fund um if you're more of a
of an average or a balanced investor you
can have a balanced fund which has a mix
of low risk and high risk assets or you
can have a high risk fund or growth fund
which invests in assets such as shares
and and property so really um the choice
is is
endless the advantages of a managed fund
particularly for a new or a first-time
investor uh that uh the fund is is
managed for you on your behalf so you
don't have to be worrying about markets
and economies and and trying to decide
what assets to buy or sell um and the
second thing is that you can access a
managed fund with a relatively small
amount of money um and so for $1,000 for
instance you can get access to a
portfolio of thousands of different
assets different in individual
Investments that you couldn't otherwise
access yourself and you couldn't
research them and you couldn't monitor
them and so on so so really to have a
fund uh professionally managed and even
for a relatively small amount uh they
are the key advantages um also all the
administration and tax is taken care of
so it's pretty straightforward it's it's
easy to invest in a managed fund and
easy to to gain access to your money out
of a manage fund as well um you receive
regular reporting so you're always up to
date with what's happening with your
investment so that gives you an
opportunity to learn as you
earn the main disadvantage of a managed
fund is that it is managed on your
behalf so you don't get a say in the
investment decisions so the fund manager
manages the fund on behalf of all the
hundreds or thousands of investors who
are invested in it so they can't take
account of your particular investment uh
wishes so the fund manager might invest
in an asset that you don't particularly
like or they might not buy enough of an
asset that that that you like um so you
don't have that that control um or that
ability to make individual investment
decisions having said that uh the fund
manager still has to manage the fund in
accordance with the rules of the fund so
you you broadly know what you're getting
but you can't choose pick and choose the
individual Investments um the other
disadvantage I guess is that for the
privilege of having the fund manager
make those decisions on your behalf they
charge a fee so there's an annual
management fee um so they're the they're
the key uh disadvantages and I guess
like like any other asset the returns
from a managed fund can't be
guaranteed investing your money or
taking your money out of a manag fund is
actually the easy bit uh that's
literally just filling out a form uh the
harder part is choosing which fund is
best suited to you because there's such
a wide variety of funds and fund
managers available that uh you really
need to put a little bit of time into
deciding which fund and and fund manager
is best suited to you so you can speak
to a financial advisor or contact a a
fund manager directly and they can talk
you through the options and that'll be
about deciding what what fund or
combination of funds suits your your
your AG and Stage uh your risk profile
your investing time frame and your your
personal circumstances uh so once you've
decided to do that uh or what fund you
want to invest in it's literally as easy
as contacting a a financial advisor or a
fund manager by phone and look they will
do all the
rest look I found over the years that
investors have actually have really
enjoyed using managed funds as sort of
an on-ramp to their investment journey
and that they'll start with a with a
manag fund they'll have a good
experience they'll learn learn about
investing through their fund manager and
then it will give them courage to then
venture out and and actually make their
own Investments individually which they
can that sit alongside their managed
fund investment so to use a managed fund
you can learn while you earn and as I
say it can develop courage too um to
then go on and invest on your own so for
more information please see the
following
links
[Music]
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