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Australia's Best Managed Funds - Walker Capital


Which is the best Managed Fund in Australia? Well, there are many types of ‘funds’ that exist within Australia, however, unless you are positioned within the financial services industry or you are a sophisticated investor by definition (annual salary exceeding $250,000 in two consecutive years or assets exceeding $2.5 million) you are less likely to not have as much knowledge around the managed funds available. 

Every working Australian has a managed fund and this falls under your superannuation. By definition, a managed fund is a type of ‘managed investment scheme’ in which your investment or money is pooled together along with others. With a fund created, the fund manager then buys and sells shares or other assets on behalf of the funds[1].

With your superannuation, the Australian super guarantee rate of 9.5% which will rise to 12% by 2025[2] is a managed fund that has been created to ensure your financial security in retirement.


As a holder of superannuation, you can log into your super account and see how much you have, what investment mix your portfolio is set up to achieve, what assets your money is invested in and how the performance it is tracking.

The difference with your superannuation fund is that by law unless you have ‘exceptional circumstances’ you can’t access your super until you are 65 or have permanently retired from 55 to 60 years old, depending on a range of circumstances[3].

[1] https://www.moneysmart.gov.au/investing/managed-funds
[2] https://www.industrysuper.com/understand-super/super-guarantee-calculator/super-guarantee-changes/
[3] https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/getting-your-super

1. Within a managed fund, it works slightly differently

A managed fund pools multiple investors’ money into a fund which is professionally managed by specialist investment managers.

You can buy into the fund by purchasing units or shares. The unit’s value is calculated daily and changes as the market value of the assets in the fund rises and falls.

Each managed fund has a specific investment objective, typically focused on different asset classes and a specific investment management philosophy to provide a defined risk/return outcome.[1]

Investing in a managed fund, is not mandatory like superannuation but it essentially operates in the same way – it’s just most Australian’s don’t know much about their super!

Managed Funds


Unlike with your super, as an investor in a managed fund, you are usually paid income or 'distributions' periodically. The value of your investment will rise or fall with the value of the underlying assets.[2]

[1] https://www3.colonialfirststate.com.au/personal/guidance/fundamentals/how-do-managed-funds-work.html
[2] https://www.moneysmart.gov.au/investing/managed-funds


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As with many funds and financial instruments for that matter, one of the major uses for managed funds is that of diversification
2. What are managed funds used for?

As with many funds and financial instruments for that matter, one of the major uses for managed funds is that of diversification.

This is done through managed funds by spreading the risk of the investments with different types of shares or levels in different asset classes, including stocks, bonds, commodities, currencies, ETFs - you name it.

With the managed fund pooling the resources from a range of investors to realise economies of scale, it can then amplify their positions through not only adding additional investors to the pool but also taking a margin loan out against the funds in the position – should the risk tolerance of the fund allow it to.

When investing in a managed fund, you are paying a percentage and fees to expert fund managers, who are responsible to the performance of the fund, picking the financial instruments being traded and managing investors’ money in a responsible and effective way.

With access to analysts, market data, insights and research that is far beyond the time and scope available to individual investors, the decisions made within the managed funds should always be backed by research.

Investing in Managed funds

Another benefit of managed funds is compound returns or reinvested products and distributions being allocated back into your fund. This allows any future performance of your investment to be now based on a larger amount – thus compounding – rather than pulling the profits from the managed fund.

This form of investing in funds is what is commonly termed as ‘passive investing’. That is to say, as an investor you are putting your money and its future performance to work through giving it to someone else to manage.

By doing this, you absolve yourself of the responsibility of the day-to-day checking, trading, research and updating, while your fund manager who has access to a wealth of time-critical data, teams of analysts and decades of market experience takes the wheel and drives your money harder.

3. What type of manage funds exist on the market today?

Although there are six (6) main types of managed funds on the market today, there are many more varieties of funds, providing a spectrum of asset allocated based on the risk profiles, desired outcomes and what the money is being invested to achieve.

Active Funds, as the name suggests, works to outperform the index that it is tracking through active management of the managed fund account.
Index Funds, also known as ETF’s or exchange-traded funds, aim to provide investors with performance in line with the particular index that it is tracking – whereas the active funds are looking to outperform the markets 
Single Sector Funds, work within a particular asset class, such as SME’s or FinTech and the performance of players within that space.
Multi-sector Funds have a diversified approach across a wide range of asset classes all with varying risk levels attached.
Income Funds are geared towards a defensive holding strategy, income generation but minimising risk at the same time. These funds are often sought out when market volatility strikes markets, industries or economies.
Growth Funds are long term investments focusing on capital growth, rather than income based. As such they are typically geared towards shares in growth companies and sectors to capitalise upon their long-term positions or outlooks.


Depending on your personal investment strategy and financial goals, you may opt to invest in one or a combination of funds to ensure your risk is spread and you are achieving the desired outcomes.

Should you be looking to hedge your investment portfolio with a safe bet looking to invest in income funds may be the strategy to employ, meanwhile should you be looking at the ‘long game’ in terms of investing money for 5+ years, then a growth fund or even an index fund could be an ideal avenue for investment.

While index funds – as well as active funds – also offer investors access to invest in a range of financial assets in emerging markets or specific industries, so they also offer significant short-term opportunities as well.

The key is under careful & experienced management, a managed fund offers significant advantages for almost all retail investors.


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4. What type of fees can you expect on a managed fund?

On a managed fund, the fee structures can vary depending on the structure of the fund.

The financial instruments that are being traded as well as the potential risks involved with the fund, not to mention the fund managers themselves, their background, past performance etc. 

However as quoted from the Sydney Morning Herald, “based on an initial investment of $50,000, the average investment management fee paid by individual small investors for multi-sector balanced managed funds is just under 1 per cent but can be as high as 2.5 per cent.

Average "retail" fees – those paid by individual investors - on multi-sector "growth" funds are 1.16 per cent and 1.18 per cent on multi-sector "aggressive" funds”[1].

5. Investing in a Fund

An alternative to investing in specific shares, whether as an individual or through a managed account, is through a fund.

Here, investors pool their resources within a fund, and the management team then invest in shares on all fund member’s behalf.

There are benefits to this, in that it is an investment and wait for style approach. You pay in and receive your profit share either quarterly or annually depending on the fund itself.


However, you do lose out on some benefits of share investments, for instance even if the fund invests in shares that pay dividends, you don’t see the full benefit of those payments.

Funds have proven effective over time, with funds that track major indices, such as the S&P 500, showing consistent gains year on year, however, there is still a risk, as with any investment, there are no such things as a guaranteed profit.

6. What are the next steps when looking into a managed fund?

If you are considering a managed fund as part of your portfolio, as with all financial products, it is always important to speak to an independent expert.

To ensure that the finds meet with your investment strategy and particular risk tolerance. With financial products, there are risks of losses, and should your fund manager take a leveraged position, your losses could exceed your initial investment.

Many fund managers have a minimum investment of between $5,000 and $250,000 for retail investors, making them out of reach for smaller investors. However, with ETF’s or exchange-traded funds that are listed on the ASX, there are other options should you be looking to dip your toe in the managed fund water sooner.

Remembering that online stockbrokers – such as IG, CommSec or ANZ Share Trading - typically charge anywhere between $10 and $20 for a $100 trade, which even at the low end means that for each $100 trade you’d actually only be getting $90 worth of stock[1].

Like with all investments, you need to consider your personal investment goals, your tolerance to risk and the amount you are looking to invest and for how long. These decisions will have a bearing on which fund you may end up looking to invest in, and also the managed fund provider you go to work with.

investment strategies for managed funds

As with all financial decisions, as an investment, it is prudent to research and seek professional advice before making any finite decisions.

Managed funds, unlike many other funds, are not all exclusive to simply sophisticated investors or high net worth individuals. They offer significant advantages to investors who wish to spread their investment and risk across a range of shares of financial assets, rather just in one particular company or asset class.

Although there are many hedging and risk benefits to this approach, there are still risks involved and these should be assessed before investing in any hedge fund.

[1] https://www.canstar.com.au/investor-hub/start-investing-with-nothing/

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7. Conclusion

Managed Funds area good option to grow your money and are able to offer a variety of ways to take advantage of the opportunity they bring.


Looking to get started in Investing:

1. Schedule an appointment (Conference Call) with an Investment Manager

2. Submit a Managed Discretionary Account (MDA) application with Walker Capital Australia.

3. Open a trading account with the Walker Capital Australia’s executing broker.

4. Select from our range of investment strategies and choose your asset allocation between the choices of accounts.

5. Once all accounts are opened, and funds have been chosen, our team gets to work and begins trading.


We welcome you to give our team a call to discuss your investment goals and objectives.

You can call Walker Capital Australia on +61 2 8076 2210, and we’ll see how we can help you achieve your investment goals.