Top benefits of investing in a managed fund


Diversifying your investment portfolio is a smart way to not only hedge against market volatility, but also put you in a stronger position to grow your wealth. Managed funds provide a unique opportunity to earn a profit without having to make any investment decisions yourself. Here’s why they could be a wise addition to your portfolio.

What is a managed fund?

Managed funds are a type of investment where money is pooled from multiple individual investors. Those pooled funds are then used by an investment manager to buy various assets – from Australian and global shares, to property, bonds, cash and more.

The biggest appeal for managed funds is their hands-off nature. Simply put, you don’t have to make the investment decisions yourself – you merely hand your money over to an investing expert and hope that they pick assets that return a profit. While they may not be attractive to some investors, those with a lack of market experience or who prefer to invest passively may enjoy managed funds for the freedom they afford.

There’s a wide variety of managed funds on the market, so it’s worth doing some research and finding an investment opportunity that aligns with your financial goals and risk tolerance.

Top benefits of investing in a managed fund

Here are a few of the reasons you might want to take advantage of managed funds:

  • Expert portfolio management: Rather than taking on all the risk with your personal decision-making, you leave the investment choices up to experienced investment managers.
  • Reduced risk: As a managed fund’s portfolio is typically spread across multiple assets – usually anywhere from 50 to 200 different securities – your investment is less affected by market volatility.
  • Simplicity: Compared to many asset types, managed funds are easy to understand and are relatively simple to buy and sell at your leisure.

Some potential drawbacks to consider

But managed funds aren’t for everyone, and there are some disadvantages that you should consider before investing:

  • Following fads: In every market there are unexpected strong performers, which tend to attract all types of investors. But if your fund manager jumps on the bandwagon too late, then they could be purchasing an asset that is overvalued and headed for a downturn.
  • Unknown tax implications: Units within your managed fund may be liable for tax on gains that you didn’t benefit from. This is made more problematic by the fact that funds in Australia don’t have to disclose potential tax liabilities.

Why you should invest in a managed fund

Managed funds allow you to get access to a variety of different asset types, and as the investments are shared with other people, the cost of entry is typically cheaper than buying shares directly. As the capital is spread across different assets, it also mitigates your risk should certain investments perform poorly.

If you choose to invest with a financial consultant like Hallmark Consulting, you will also get the benefit of expert advice and access to managed funds that may not be available to the wider public.

“We provide opportunities to invest in strong-performing managed funds for a number of our clients,” says Daran Thomson, Managing Director at Hallmark Consulting. “Some of these offer high guaranteed returns, and they provide an investment opportunity for those who may not yet have enough in their super to invest in their ideal property. Ultimately, these investments are a way to boost their funds so they can achieve their main wealth goal of property ownership.”

If managed funds sound like they could be a potentially lucrative addition to your portfolio, we can help find the right funds for your financial goals. Contact Hallmark Consulting or call 1300 135 295 to learn more about the exciting world of managed funds.