Managed funds

Investing in a managed fund can be a great way to build wealth and you don’t need a fortune to get started.

So, what is a managed fund?

Put simply, it’s a professional managed investment portfolio where your money is pooled together with other investors to buy and sell assets on your behalf.

It allows you to invest in different types of financial assets that may not be available to individual investors.

Each investor will buy into a fund at a particular unit price.

This means that if Tom has 10,000 dollars to invest in a managed fund and the application price at the time was 2 dollars per unit, Tom would receive 5,000 units within the fund.

Although the number of units he owns will remain constant the unit price will change according to changes in the market value of the portfolio or the total number of units issued for the fund.

After taking fees and costs into account, in this example, Tom and all other investors, would see an increase in their investment capital and will also receive the benefit of any income earned in the fund.

This income is paid to them in the form of a distribution.

With this in mind, managed funds come in many shapes and sizes, and each will have a unique investment strategy.

This means that you can choose a fund that suits you and your financial goals.

For example, you can choose funds that invest in only one type of investment, or funds that invest across a range of assets.

Different funds will also carry different levels of risk, which means you can choose a fund depending on the level of risk you’re comfortable with.

Lower risk investments will usually focus on generating income, and medium to high risk investments will focus on capital growth as well as income.

In most cases you can also add to your investment at any time, and reinvest any income earned back into the fund.

The choice is yours, but how do you know what type of managed fund to choose?

The right type for you will always depend on your financial objectives, time frame and your appetite for risk.

If you have questions or would like to learn more about managed funds why not speak with a financial planner. They can take you through your options and point you in the right direction to securing your financial future and achieving your goals.

To find out more, head to bendigobank.com.au/personal/financial-advice.

Issued by Sandhurst Trustees Limited ABN 16 004 030 737 AFSL 237906 (Sandhurst), a subsidiary of Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL 237879 (the Bank). Both these companies receive remuneration on the issue of these products or the service they provide, full details of which are contained in the relevant Product Disclosure Statement (PDS). Investments in these products are not deposits with, guaranteed by, or liabilities of the Bank or any of its related entities. This video contains general advice only. You should consider your situation and read the relevant PDS, available at bendigobank.com.au/personal/investing/managed-funds before making an investment decision.