The Benefits of Managed Investing
A managed investment is a pool of money that’s overseen by professional investment managers who purchase and sell investments on behalf of investors. The assets in a managed fund are usually financial in nature (shares of companies, property) but may also include cash and titles to physical assets such as land or cars. Managed investments can offer a high level of diversification as they often hold multiple asset classes that are diversified by sector or industry (e.g. Australian shares, property).
Unlike individual investment portfolios where you choose your own investments, in a managed account the professional guiding the funds (known as the Responsible Entity) has control over when to buy and sell. This can make it easier to manage tax liabilities as the professional can attempt to offset gains and losses with the timing of sales. It is worth noting that a fund’s investment objective and the type of assets it invests in determines its risk profile.
There are several benefits of managed investing, including the fact that your investments are diversified across many different asset classes and have professional oversight. These professionals can help you choose a strategy that’s best for you and your goals, which helps reduce risk. They can also help keep fees low, which makes a difference in your return.
As a fiduciary, the professional managing the managed investment owes a duty to the principal investor and must act in their best interests. They are required to supply regular reports to the client outlining the account’s performance and holdings. This gives you a high level of confidence that the investment manager will work in your interest.
You’ll likely have a collection of investment accounts (including a few IRAs, old 401(k)s from former jobs and a brokerage account you opened after watching a Warren Buffett documentary). Managed investing can simplify your financial life by consolidating these accounts into a diversified portfolio that’s designed to align with your goals.
Professionals have access to insights and research that you won’t and can use this to help reduce risk and improve your returns. They can also provide expert advice on areas like taxes and retirement planning.
A managed investment can provide access to exclusive opportunities that aren’t available to retail investors. For example, a professional with the right connections and expertise might be able to get your money into private investments or funds that have a high minimum contribution amount.
If you’re thinking about moving to managed investing, start by researching the options that are available to you. Then look for a provider that offers a range of services to fit your needs, with a transparent pricing structure and no hidden fees. It’s also important to check the PDS on the managed investment for information on its fees, how long you should invest for and the level of risk it offers. The PDS will help you compare the managed investment to your own needs and goals. Managed investing