Managed funds unlike a wide range of elite financial instruments and funds are not exclusively created for the sophisticated investor or high net worth individual, as they have options to start investing in at sometimes low levels.
When it comes to the question of the best-managed funds, the answer to many investors is ‘how long is a piece of string’. Whenever looking for the best performing manage funds in Australia and across the world, the first step is to ensure you have a personal investment strategy in place before you proceed.
Questions such as what is your risk tolerance? If I lost my investment tomorrow, would I be able to make the money back easily? Or, I am setting myself up for retirement in a few years, should I be conservative in where I invest my funds?
With this in mind, investors should select the type of fund to invest in, be it cash and conservative that have very little risk attached, little access to volatility and less return. If you’re looking to capitalise on markets and generate a profit, a sustainable living income through your investment could be the answer and the balance or growth funds would be more appropriate.
What makes the best-managed funds more or less susceptible to market volatility is the assets in which they are invested in. Funds that have greater exposure to shares and property have a higher risk, whereas cash or fixed interest assets have lower exposure.
Even within fund mixes themselves, there are more and less risky options, such as ETFs or exchange-traded funds, which track a particular index or group of assets – such as the ASX 200 or the top 20 companies within emerging markets. As can be seen within those two funds groups alone, the ASX 200 would provide a far less exposed position than emerging markets, due to their established performance over many years.
Traditionally managed funds are an unlisted investment and purchased through an application by investors after reading the product disclosure statement and the prospectus documents from the particular fund.
The ASX now has a wide range of listed and unlisted funds, some of which can be purchased on the ASX such as:
The best-managed fund really comes down to the one that can meet your individual financial needs. It is the fund that has the strategy to perform over the designated period you are hoping to have your funds tied up for.
It is the managed fund that provides hedging against market volatility or exposure to markets that provide a potential at the level to which you feel comfortable.
The best-managed funds like a good wine, are the funds you like best, or the fund that suits you, so the next step should always be to speak to your broker or fund management specialist, as there are risks and losses that can occur from even the best-managed funds.
For the full breakdown on managed funds check out our article: The essential Information you need when looking to invest in managed funds.
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.