What is a Managed Fund Investment?
A USA managed fund investment is exactly that. It is an investment fund that is managed professionally by a manager, who invests the funds in a variety of different assets. It is up to the fund manager to determine the actual type of investments and the mix of investments the fund will invest in.
The fund is made up from investors who pool their resources into the fund for the purpose of investment. The fund manager will take it and invest into various markets, such as shares, property, government stock, deposits, etc.
Most managed funds are unitised, which means the investor buys units in the fund. The unit value is based on the performance and size of the fund. If the fund is doing well, the unit price goes up and if the fund is not doing so well, the unit price will decline.
There is also an entry unit price, as well as an exit unit price. The difference between the two is reflected in the cost of entering the fund.
What happens with the fund is that ...
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