The world of investing is an ever changing world. This article “What Are Managed Funds?” offers some insight into a newer category of investments. There are also links to other sights that will help to further your education into managed funds.
Let’s start with first things first, what is the definition of a “managed” fund or account? This is a type of investment account that is individually owned but “managed” by a professional manager that has been hired. This is different from a mutual fund which is managed on the behalf of multiple mutual fund members or holders. Managed accounts are dealt with on a personalized basis and customized for the needs of the specific holder of the account. This means that the professional managing the account is able to make investments a various types of investments to meet the needs of individual investor. Here are some of the advantages of using managed funds versus the do it yourself or DIY method:
Advantages Of Using Managed Fund Accounts
#1. Advantage Of Using Managed Fund Accounts – You Have A Full Time Expert Managing Your Account – In the world of investing, time is important. The average person doesn’t have time to react to the ever changing market situations. A full time manager does. The are managing your money while you are working your job, vacationing or simply enjoying the fruits of your labor.
#2. Advantage Of Using Managed Fund Accounts – The Spreading Of Your Investments Will Reduce Risk – Most people simply don’t have the resources to create a portfolio that will adequately reduce their risk. Also the time necessary to compare investments can be daunting. Managed fund accounts will accomplish this for you.
3. Chances beyond your normal reach: Managed funds have access to the best investment opportunities due to their size and investment muscle.
4. Value and Convenience: Managed funds are low maintenance investments compared with property, shares or even term deposits.
5. Advantages of tax: Professionally managed funds take advantage of tax benefits and pass them on to you when you pay income distributions. So managed funds not only help you to achieve better returns but also may help you pay less tax.
The four types of managed funds are
1. Unit Trusts: This works by pooling money from a number of investors and then using this money to buy a variety of investments. It gives you a greater power of buying and allows you to share costs and give you the benefits of professional management.
2. Group Investment Funds: This is also an investment where individuals pool their money together to create greater buying power, cost sharing and take advantage of professional management.
3. Superannuating Funds: These are the largest and most popular type of managed investment focused more toward conservative investments.
4. Insurance Bonds: This is used to describe the range of investment-linked policies offered by several life insurance companies. This is very similar to unit trusts
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