Managed funds buying guide

Want to invest your money but not sure where to start? A managed fund might be what you’re after.
 
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  • Updated:20 Feb 2007
 

06.Checklist

Use the answers to these questions to compare similar funds. Most of the information can be found in the fund’s product disclosure statement (PDS).

  • What are the manager’s risk and return objectives, as stated in the product disclosure statement, and do they match your investment strategy?
  • What has been the short, medium and long-term performance of the fund, and does it match the manager’s objectives?
  • How volatile is the value of the investment and does this match the manager’s risk objectives?
  • Are there any current issues you should be aware of, such as key staff leaving the fund manager? A financial adviser might be able to tell you.
  • How easy would it be to get your money back? Can you request withdrawals by phone or online, how long does it usually take, is there a minimum account balance and in what amounts can you redeem money? Can the manager apply a waiting period before processing your withdrawal request?
  • What fees are involved? Use the fee calculator to keep track of them.
  • Is it possible to switch your money to another fund with the same manager, and would you have to pay a fee for this?
  • What’s the minimum initial investment and what are the minimum amounts you can add to it?
  • Can you make regular extra contributions (a savings plan)?
  • How often does the fund manager distribute income and can you reinvest this in the fund?

Managed funds and tax

Taxation is a complex issue, for example only 50% of the capital gains is taxed for some funds’ returns. Check with your financial planner, accountant or tax adviser whether a fund is suitable for your tax requirements.

 

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