How Managed Funds Work
Many Perth financial planners like managed funds because they offer diversification. They are a large part of many investment strategies. At Approved Financial Planners, we recommend any of a number of investments, using criteria such as your risk tolerance and financial goals as determining factors.
In another of a continuing series of posts in which we provide basic information for investors in accordance with ASIC and their MoneySmart website, we would like to demonstrate for you how ASIC views managed funds. Remember that we don’t give any specific advice on this blog, nor should anything in this piece be interpreted as individual advice.
What are Managed Funds?
Managed funds fall under the category of “managed investment schemes.” Your money is placed into a fund with that of other investors. An investment manager uses those funds to make investments on your behalf. This usually involves buying and/or selling shares and/or other assets.*
The funds usually yield periodic income, called “distributions.” The value of your investment is linked to that of the underlying assets. The investment manager is often referred to as the “responsible entity” or “fund manager.”*