Life is full of goals, from short term goals like buying a vehicle to long term goals like buying a house, the list goes on. Goals give a meaning and direction to a person’s life. But no goal can be achieved without finances, which makes financial planning an inseparable factor for any goal. The investment avenues chosen for any financial plan can make or break the financial plan and it is advisable to take expert advice while selecting investment avenues. Out of the different investment avenues available, managed funds have gained much popularity in recent times.

Managed funds are investment funds which are managed by expert professionals. They pool money from different investors to create an investment fund and create a diversified portfolio of investment. Thus, if a person is new without much knowledge about the investment scenario or is too busy to monitor his investments, he can relax, by leaving the burden of managing his investments in hands of specialists. As managed funds pool an investor’s money with other investors, the fund manager can spread it across diverse sectors and asset classes. The return of this pooled investment tends to be higher than individual investments. Managed funds comprise of different schemes, out of which cash management funds are popular with short term  investors. Cash managed funds are a type of single sector funds. They invest in securities that pay higher interest rate than bank accounts and bear the lowest risk amongst the various asset classes. It includes investment in money market type instruments like bills of exchange, term deposits, government bonds as well as semi-government bonds. The low risk and competitive returns make them an attractive investment option.

Managed funds can also be subdivided into wholesale funds and retail funds, depending on the target markets and investment amounts. Wholesale funds are designed to suit the needs of professional investors and the investment amount is significantly high, usually around A$100,000 per fund. Retail funds, on the other hand, cater to individual investors with minimum investment amount of A$1000. As money is available in larger blocks the fees charged in wholesale funds is lower than retail funds. Usually people with a sound understanding and degree knowledge about the investment markets go for wholesale funds.

Managed funds make an attractive investment avenue as the person gets a wide choice of investment options that he can choose from. An investment will only meet your expectations if it is chosen keeping in to consideration the person’s risk tolerance, time frame and objective of investment.

Managed fund is a cost effective package providing access to a mix of diversified investments managed by professionals. It is, indeed, a boon for small and big investors alike.