Managed Funds Definition

Investors can place their money into a managed fund instead of investing directly in shares or stocks.

What are Managed funds? A managed fund is a type of investment where a number of investors pool their money into one fund which is then invested by the manager in a wide variety of assets including government bonds, stocks, shares, etc.

Managed funds enable individuals to invest in a diversified portfolio of investments and hence reducing the overall level of risk in the investment. Managed funds can be either listed or unlisted. Those that are listed can be traded on the share market via a broker. Investors can buy at an offer price and sell at a bid price.

There are different types of managed funds available, such as Unit Trusts, Superannuation Funds, Group Investment Funds, Insurance Bonds. Unit trusts are collective funds that allow individual investors to pool their money in a single fund and then using it to buy a variety of investments. Superannuation Fund is one of the most popular types of managed investment and it usually has a nominated retirement date. Group Investment Funds are similar to Unit Trusts because investors are joining together to create a greater buying power. An insurance bond (or investment bond) is a financial instrument that is offered by life insurance companies.

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