What is a managed fund?
A managed fund is an investment vehicle that will allow you to gain access to the services of a professional fund manager, specialised in the management of a range of different investments.
Whilst they can appear to be complicated from the outside a managed fund is simply where you are invested with a group of other investors in a pool of assets. Managed funds allow investors who would not normally have enough to invest with a professional fund manager to combine their money together to obtain the investment scale needed.
You will own units in the managed fund (like owning shares in a company) in proportion to the amount you have invested.
A managed fund will generally be governed by a set of rules. These rules are spelled out in the governing document of a managed fund, referred to as the Trust Deed. The Trust Deed will set out your rights as an investor in the managed fund and the powers granted to the Trustee and manager of the fund.
Managed funds are the most common method by which retail investors including individuals or “mums and dads” invest into professional markets. Self-Managed Superannuation Funds or SMSF’s also invest extensively into managed funds.
Australia has one of the largest pools of contestable funds under management globally, valued at about A$1.3 trillion (Austrade 2015).
All managed funds made available to retail investors will have a Product Disclosure Statement or “PDS” which will set out all the benefits, features and risks of an investment in a fund along with specific instructions on how to invest.