If you have money to invest and want to pay a professional to make the investment decisions for you, a managed fund might be for you.
Golden rules for investing in managed funds
- Prepare an investing plan. This sets out your financial goals, how long you plan to invest and what risks you're comfortable with. This will help you choose a managed fund that suits your needs.
- Research the different types of managed funds. These include unlisted managed funds, CCIVs, listed investment companies, exchange traded funds (ETFs) and hedge funds.
- Check the product disclosure statement (PDS) of the fund, and find out what to do if you have a problem.
- Compare managed funds and look at:
- the long-term performance, for example 5 to 10 years. Compare the fund's performance to index funds that invest in the same asset class or similar managed funds
- the risks of the fund – you may be able to invest in a fund (or multiple funds) and get a similar return for a lower level risk
- the fees – use the managed fund fee calculator to see the impact of fees
- Spread your money across different fund managers and funds that invest in different asset classes. This can help you diversify and lower your portfolio risk
- If you're unsure if you should invest in a managed fund, speak to a licensed financial adviser.