There are so many different types of investing that sometimes... it can all feel just a 'lil too much. Investing in ETFs, investing directly into the sharemarket and so many other ways.

One popular investment strategy is investing into a managed fund.

What’s a managed fund?

A managed fund is where investors’ money is pooled together, and invested (and managed) by a professional investment manager. You don’t own individual shares…rather, you own ‘units’ in the fund. 

Generally, our super funds are a type of managed fund.

How do managed funds work?

Depending on your risk tolerance and the managed fund provider, a managed fund may invest in a particular asset class (think: a fund that invests only in the share market or property market), or they may be a multi-asset fund (think: a fund that invests in fixed interest funds, property funds, share funds and also holds cash).

Multi-sector options are investments across different asset classes, but they’re categorised into risk profiles. So, you could have a:

• Conservative option
• Balanced option
• Growth option
• High growth option.
  

Which managed fund is right for me?

All managed funds will come with a product disclosure statement (PDS), which is like a little pamphlet that explains things like:

• What assets the fund is invested in
• The fees
• The risks of investing in the fund
• The target return.
  

You’ll want to look at the fund’s long-term returns and compare it against a benchmark, like the ASX200. You’ll also want to review the risks and see if they align with your risk tolerance.