Managed Investments

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A managed investment is an investment vehicle where many investors pool their money to buy assets that would usually be too expensive for a single investor to acquire.

Professional fund managers use the money to buy securities such as shares, property, fixed interest and cash that are consistent with the fund's investment objectives. This gives an individual access to a wider range of investments providing diversification and professional management.

When you invest in a managed investment you usually purchase units in that fund. Since your money is pooled with many others you are able to spread your assets. Even with a relatively small amount to invest, a managed imvestment provides a greater degree of diversification than direct investment.

Investing in shares with a small amount, say $5000, gives you the ability to buy shares in only one or two companies, however, investing in managed investments with the same amount you could have your money invested in 20 or more different companies. By spreading or diversifying your investment you also spread your risk that means if one or two shares perform badly, their losses will be absorbed by other shares that perform well.

Managed investments are usually medium to long term investments, that is, at least three to five years, although this varies amongst managed investments . You may withdraw your money earlier if you wish.

Managed investments are well suited to the superannuation environment as they are a long-term investment vehicle.