Advertisement

Why managed investments
Start building wealth sooner, with instant diversification

With more funds to choose from than ever before, managed funds can still be a smart choice for some investors, especially in volatile markets. That’s because the right managed fund can help you diversify into assets that are hard to access on your own, including defensive assets like government bonds.

But it’s important to do your homework and make sure you’re getting value for your annual management fee. Which is why InvestSMART makes it easy to compare and research managed funds online.

Managed funds — the pros

Extend your reach

A managed fund pools your money with contributions from thousands of other investors, helping you access investment opportunities that would normally be out of reach — from New York skyscrapers to Chinese factories.

Diversify, diversify, diversify

In an unpredictable world, diversification is still the single best way to reduce risk and smooth out investment returns. By investing in a multi-sector managed fund, you can get instant diversification for a tiny upfront investment. Or choose a single-sector managed fund to complement your other investments — using bonds or property to diversify your direct share portfolio, for example.

Go on the defensive

Managed funds can be a great way to access lower-risk assets, like cash investments or government bonds. That can be especially valuable for self-managed super fund investors and retirees looking for a reliable income stream.

Start investing with less

You can start investing in managed funds with as little as $1,000, then build wealth over time with a regular investment plan. You’ll be surprised how quickly even a small monthly investment can add up.

Invest with confidence

Most importantly, managed funds are run by full-time teams of investment professionals, including specialist managers with deep expertise in a particular asset class. That allows you to focus on the things you’re good at and leave the rest to the professionals, confident that your money is in safe hands.

Managed funds — the cons

Fees

All that professional expertise comes at a price. Managed funds involve annual management fees and other costs, handily summed up in single number: the indirect cost ratio (ICR), which is the proportion of your investment eaten up by costs each year.

ICRs can range from as little as 0.25% pa to as much as 2.5% pa, depending on how actively the fund manager manages your investments. And some funds may charge other fees as well, including contribution fees on each investment (though these are much less common than in the past).

Less control

If you want to decide exactly which assets your money buys, or when they’re bought and sold, then a managed fund might not be for you. Having more control over the timing of asset purchases and sales can be important if you need to precisely manage capital gains and losses within your portfolio for tax reasons.

Transparency

Direct investments like shares are traded on an open market, so it’s easy to check their value and track their performance over time. But historically, the performance of managed funds has been harder to get a handle on

That’s where InvestSMART can help. We make it easy to check each fund’s past performance, fee structure and asset allocation — so you know exactly what you’ll need to pay and how your money is invested.

Finding the right fund

Switch and save

It only takes minutes to switch your existing managed funds to InvestSMART, but you can enjoy the savings year after year:

  1. Fill in our fast online form.
  2. Print the form, then sign it and send it by:

    Email

    admin@investsmart.com.au

    Fax

    1300 880 260

    Mail

    InvestSMART Financial Services Pty Limited
    Reply Paid 4477
    Sydney NSW 2001
  3. You'll start saving straight away. And once every year, on the anniversary of when you switched to InvestSMART, you’ll receive your trail commission rebate, either as a cheque or via electronic fund transfer (EFT).
  4. To receive your TrailCap payments via electronic fund transfer (EFT) to an Australian bank account — just complete the EFT section in the online application form.
    If you have already nominated InvestSMART as your fund broker and have been receiving TrailCap cheques from us but would rather your money is deposited directly into your bank account, you can let us know your EFT details in the InvestSMART EFT payments form.