A managed fund is a pool of investor assets which is controlled by an investment management company and invested to generate a positive return. Investment options in managed funds vary from growth, balanced, conservative and so on. You can invest in asset classes such as shares, bonds, commodities, real estate and infrastructure. Sectors, geographies and investment styles are also available.
By investing in a managed fund you are allocated with units in the fund. The value of each unit reflects the underlying value of the fund’s assets and are usually calculated on a daily basis which is shown in the unit price. When the value of the fund’s investment rise, the unit price will increase accordingly and vice versa.
A managed fund can be traded on an exchange like the ASX, or they can be unlisted and purchased and sold directly from the investment manager or via a platform like mFunds. Listed managed funds prices will fluctuate not only based on the value of the underlying investments, but also from market forces like buyers and sellers.
