How to choose the right investment vehicle

The webinar covers exchanged traded funds (ETFs), listed investment companies (LICs), managed funds, and separately managed accounts (SMAs).

ETFs are investment funds traded on stock exchanges, much like stocks. They hold assets such as stocks, commodities, or bonds and generally operate with an arbitrage mechanism designed to keep trading close to its net asset value.

Investors should carefully evaluate the fee structure of each investment vehicle, as fees can significantly impact returns. Understanding management fees, performance fees, and any additional costs is crucial.

A high watermark is a performance measure used in managed funds to ensure that fund managers only receive performance fees if the fund's value exceeds its previous highest value. This protects investors from paying fees during periods of underperformance.

Income from investment vehicles can come in various forms, such as dividends from stocks within ETFs or LICs, interest from bonds, or distributions from managed funds. The specific income mechanism depends on the type of assets held.

LICs offer the potential for capital growth and income through dividends, but they may also involve risks such as market volatility and management performance. It's important to assess the company's track record and management strategy.

Managed funds pool money from multiple investors to invest in a diversified portfolio, while SMAs offer personalized investment portfolios tailored to individual investor preferences and goals.

You can find more information about InvestSMART's range of investment opportunities by visiting their website and exploring their portfolio offerings.