Managed Investments

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 many investors pool together their capital and this provides significant combined capital that can be invested. It also immediately provides an increase in buying strength to the group.

Managed funds spread your risk and enhance the potential growth of your savings because the fund manager can spread the investments more widely than you could do yourself, as an individual. The fund can also gain access to overseas investments that most individuals would not know much about.

Managed funds are one of the best sources of long-term growth and financial security available to the ordinary investor.

Investors with Limited Funds or Experience
A managed fund is a very good option for investors who have limited funds to purchase directly various types of investments, such as government stocks or property. The fund is made up of savings put in by many investors, which combined can make up a considerable pool.

Basics of a Managed Scheme
The following are the features of a managed investment scheme:

  • Your money is pooled together with money from other investors to buy investment assets.

  • You are virtually a part owner in the scheme because of the units you have purchased. Instead of shares you get units in the scheme.

  • A professional investment manager who is experienced in investment will take over operation of the scheme on behalf of all the investors. You don’t need any day-to-day involvement of the scheme because it is left to the experts.

  • You will find that managed investment schemes are called by different names, but essentially they all operate in the same way. Other names used are managed funds, unit trusts, managed trusts, investment trusts, collective investments, pooled funds and investment funds.