Get your Free Financial Fitness score and personalised report

How do I invest in a managed fund?

Eclipse

An investment portfolio, whether big or small, should be a critical part of any financial planning strategy. Making the right investments now can pay off in a major way when you end up settling down to live or retire in Cannonvale, Proserpine, Airlie Beach or any of the other fantastic areas in the Whitsunday Shire. 

A managed fund can be a more stress-free way of starting a portfolio that still stands to give you a significant return down the line. Here are the steps involved in investing in one. 

Choosing the right managed fund

Just as no two investors are alike, you'll find what can be an overwhelming diversity in the kinds of managed funds out there: Locally or globally focused, active or passive, single-asset or multi-sector and so on. There are literally thousands out there. 

You can find out more about a particular managed fund from a number of sources. Your first port of call should be the fund's product disclosure statement (PDS), which all managed funds are required to have registered with the Australian Securities and Investments Commission. Your financial planner can provide this for you, or you might be able to find it online or email a fund manager asking for it. 

Be sure when you choose the fund that its objectives and investment strategy line up with your own particular needs. Look at its long-term performance, and assess the risk involved. 

Checking the fees

Being a professionally managed investment fund, managed funds come with a price. No one's going to do all that work for you for free! It's important that you find out just how much you might be charged before committing to a fund. 

As outlined by the Australian Securities and Investments Commission, some of the fees you might find are:

  • Entry fees, generally around 1-5 per cent
  • Management fees, which are usually around 0.5-2.5 per cent a year
  • Performance fees, which are less typical and act as a bonus for outperforming expectations

When you find a few funds that strike your fancy, compare the value of their fees. 

Buying into the fund

Depending on whether or not the fund is listed impacts the way you can invest in one. Listed funds can be bought and sold through a stockbroker on a market, similar to how shares are dealt with. Brokers will charge you a fee, and you'll also have to pay stamp duty on your purchase. 

Unlisted managed funds typically are bought through either a financial planner or directly from the fund manager. The benefit of using the former is that they will also be able to give you valuable insight into what kind of fund would be most effective for you, by taking stock of your entire situation. 

Once you've started investing, be sure to hang on to all of those statements and read your regular performance reports. They'll help you keep track of how the fund is going and will be required at tax time. 

Airlie Beach
07 4946 7359
Suite 2
Conway House
6 Island Drive
Cannonvale, 4802
Gold Coast
1300 857 359
Suite 8
2 Fortune Street
Coomera
Queensland, 4209
Brisbane
1300 857 359
310 Edward Street
Brisbane
Queensland, 4000
Prosperine
07 4945 5349
Level 1
Federation House
20 Chapman Street
Prosperine, 4800
Eclipse Financial Services Pty Ltd | ta Eclipse Financial Services | ABN 47 106 053 249 | Corporate Authorised Representative No 422806 of Professional Investment Services Pty Ltd | ABN 11 074 608 558 | Aust Financial Services License 234951
www.profinvest.com.au
The Fine Print| Contact Us| Financial Services Guide| Complaints| Privacy Policy