20+ Top Managed Funds in Australia: Best Investment Options
Introduction
Australia’s financial market offers a plethora of investment opportunities, with managed funds standing out as one of the most popular choices among investors. Managed funds pool money from multiple investors to invest in a diverse range of assets, providing a convenient and efficient way to build a diversified portfolio. This comprehensive guide will explore the top managed funds in Australia, including investment strategies, performance metrics, and insights into the fund managers who drive these investments.
Understanding Managed Funds
Managed funds are professionally managed investment vehicles that allow investors to pool their money together to invest in a variety of assets, including stocks, bonds, and other securities. These funds are overseen by experienced fund managers who make investment decisions on behalf of the investors. The primary advantage of managed funds is the diversification they offer, reducing the risk associated with individual investments.
Types of Managed Funds
- Equity Funds: These funds primarily invest in stocks or shares of companies. They aim for capital growth and are suitable for investors seeking higher returns over the long term.
- Fixed-Income Funds: Also known as bond funds, these invest in government and corporate bonds. They are designed to provide regular income with lower risk compared to equity funds.
- Balanced Funds: These funds maintain a balance between equity and fixed-income investments, offering a mix of growth and income.
- Index Funds: These are designed to replicate the performance of a specific index, such as the ASX 200. They offer low-cost investment options with broad market exposure.
- Exchange-Traded Funds (ETFs): Similar to index funds, ETFs are traded on stock exchanges and can be bought and sold like stocks. They offer flexibility and lower management fees.
- Sector Funds: These focus on specific sectors of the economy, such as technology or healthcare, providing targeted exposure to particular industries.
- Sustainable Funds: Also known as ESG funds or ethical funds, these invest in companies that meet certain environmental, social, and governance criteria.
Top Managed Funds in Australia
| Fund Name | Description | 3 Mth. Returns | 1 Yr. Returns | 3 Yr. Returns |
| Vanguard Australian Shares Index Fund | The Vanguard Australian Shares Index Fund aims to track the performance of the S&P/ASX 300 Index, providing broad exposure to the Australian equity market. Known for its low management fees and solid performance, it is a preferred choice for investors seeking long-term growth. | 4.00% | 18.00% | 10.50% |
| Australian Ethical Balanced Fund | The Australian Ethical Balanced Fund invests in a mix of growth and income assets, with a focus on ethical and sustainable investments. It excludes companies involved in harmful activities and seeks to make a positive impact on society and the environment. | 3.75% | 14.50% | 8.25% |
| Perpetual Wholesale Industrial Fund | The Perpetual Wholesale Industrial Fund focuses on industrial companies within Australia. It aims for capital growth and is known for its active management approach, where the fund manager selects stocks based on in-depth research and analysis. | 2.50% | 12.75% | 9.00% |
| BetaShares Australian High Interest Cash ETF | The BetaShares Australian High Interest Cash ETF is an excellent choice for those seeking a low-risk investment option. It invests in high-interest bank deposits, providing regular income with minimal risk. | 1.25% | 5.00% | 4.50% |
| Platinum International Fund | The Platinum International Fund offers exposure to international markets, investing in undervalued stocks across the globe. It focuses on long-term capital growth and employs a contrarian investment strategy. | 5.50% | 20.00% | 15.00% |
| IOOF MultiMix Balanced Growth Trust | IOOF MultiMix Balanced Growth Trust invests in a diversified portfolio of growth assets. | 3.25% | 15.75% | 11.25% |
| Pendal Sustainable Australian Share Fund | This fund invests in Australian companies with strong environmental, social, and governance practices. | 4.75% | 17.25% | 12.00% |
| AMP Capital Global Property Securities Fund | AMP Capital Global Property Securities Fund focuses on listed property securities globally. | 2.00% | 8.50% | 6.75% |
| VanEck Vectors Australian Property ETF | VanEck Vectors Australian Property ETF tracks the MVIS Australia A-REITs Index. | 1.50% | 6.25% | 5.00% |
| BT Wholesale Ethical Share Fund | BT Wholesale Ethical Share Fund invests in Australian companies that meet ethical criteria. | 3.50% | 13.00% | 9.50% |
| Australian Unity Diversified Property Fund | Australian Unity Diversified Property Fund invests in a diversified portfolio of Australian properties. | 1.75% | 7.00% | 5.50% |
| Vanguard Australian Fixed Interest Index ETF | Vanguard Australian Fixed Interest Index ETF tracks the Bloomberg AusBond Composite 0+ Yr Index. | 0.75% | 3.25% | 2.50% |
| BlackRock iShares Core S&P/ASX 200 ETF | BlackRock iShares Core S&P/ASX 200 ETF aims to replicate the performance of the S&P/ASX 200 Index. | 3.00% | 12.00% | 8.00% |
| Legg Mason Martin Currie Equity Income Fund | This fund invests in Australian equities, focusing on income generation and capital growth. | 2.25% | 9.75% | 7.00% |
| Fidelity Australian Equities Fund | Fidelity Australian Equities Fund invests in a diversified portfolio of Australian stocks. | 3.75% | 14.25% | 10.25% |
| Russell Australian Responsible Investment ETF | Russell Australian Responsible Investment ETF focuses on Australian companies with strong ESG practices. | 4.25% | 16.50% | 11.75% |
| UBS IQ Morningstar Australia Dividend Yield ETF | UBS IQ Morningstar Australia Dividend Yield ETF tracks the Morningstar Australia Dividend Yield Focus Index. | 2.50% | 10.50% | 7.75% |
| Pengana International Fund | Pengana International Fund invests in a concentrated portfolio of international companies. | 5.75% | 21.50% | 16.25% |
| Perennial Value Australian Shares Trust | Perennial Value Australian Shares Trust focuses on undervalued Australian companies. | 3.00% | 11.75% | 8.50% |
| Ausbil Australian Active Equity Fund | Ausbil Australian Active Equity Fund invests in a diversified portfolio of Australian equities. | 3.50% | 14.00% | 9.75% |
| Bennelong Australian Equities Fund | Bennelong Australian Equities Fund focuses on delivering long-term capital growth from Australian equities. | 3.25% | 12.75% | 9.00% |
| Nikko AM Australian Share Wholesale Fund | Nikko AM Australian Share Wholesale Fund invests in a concentrated portfolio of Australian shares. | 3.00% | 11.50% | 8.25% |
Factors to Consider When Choosing a Managed Fund
Selecting the right managed fund requires careful consideration of various factors:
1. Investment Goals
Determine your investment objectives, whether it’s long-term growth, income generation, or capital preservation. Different funds cater to different goals.
2. Risk Tolerance
Understand your risk tolerance. Equity funds and sector funds are generally higher risk, while fixed-income funds and balanced funds offer more stability.
3. Fund Performance
Examine the historical performance of the fund. Look for consistent returns and compare them against the relevant benchmarks.
4. Fees and Charges
Consider the management fees and other charges associated with the fund. Lower fees can significantly enhance your net returns over time.
5. Fund Manager’s Track Record
Research the fund manager’s expertise and track record. Experienced managers with a history of outperforming the market are generally more reliable.
6. Diversification
Evaluate the fund’s diversification strategy. A well-diversified fund spreads risk across various asset classes and sectors.
The Role of Financial Advisors
Engaging a financial advisor can be beneficial in navigating the complex world of managed funds. Advisors provide personalized advice based on your financial situation and investment goals. They can help you select the right funds, manage your portfolio, and adjust your investments as needed.
Performance Metrics and Evaluation
Evaluating the performance of managed funds involves analyzing several key metrics:
1. Returns
Review the fund’s returns over different time periods, such as 1-year, 3-year, and 5-year returns. This provides insight into its performance consistency.
2. Risk-Adjusted Returns
Consider the risk-adjusted returns, which take into account the fund’s volatility. Metrics like the Sharpe ratio can help assess whether the returns are commensurate with the risks taken.
3. Benchmark Comparison
Compare the fund’s performance to relevant benchmarks. A fund that consistently outperforms its benchmark is generally considered a strong performer.
4. Expense Ratio
Examine the expense ratio, which includes management fees and other operating expenses. Lower expense ratios can enhance overall returns.
5. Fund Ratings
Look for ratings from independent agencies such as Morningstar. These ratings provide an additional layer of evaluation based on various performance and risk factors.
The Bottom Line
Investing in managed funds is a prudent way to diversify your portfolio and achieve your financial goals. The top managed funds in Australia, such as the Vanguard Australian Shares Index Fund, Australian Ethical Balanced Fund, and Perpetual Wholesale Industrial Fund, offer a range of options to suit different investment strategies and risk tolerances.
By carefully considering factors such as investment goals, risk tolerance, and fund performance, you can select the right funds to meet your needs. Additionally, leveraging the expertise of financial advisors and understanding key performance metrics will help you make informed investment decisions and optimize your portfolio for long-term success.
FAQ (Frequently Asked Questions)
1. What are managed funds?
Managed funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of assets, such as stocks, bonds, and other securities. These funds are managed by professional fund managers who make investment decisions on behalf of the investors.
2. How do managed funds work?
Managed funds collect money from individual investors and use it to buy a variety of assets. The fund manager selects and manages these assets according to the fund’s investment strategy. Investors buy units in the fund, and their returns are based on the performance of the underlying investments.
3. What are the benefits of investing in managed funds?
Managed funds offer several benefits, including diversification, professional management, and access to a wide range of assets. They also provide convenience, as investors do not need to manage individual investments themselves.
4. What types of managed funds are available in Australia?
In Australia, there are various types of managed funds, including equity funds, fixed-income funds, balanced funds, index funds, sector funds, and ethical funds. Each type focuses on different investment strategies and asset classes.
5. How do I choose the right managed fund?
Choosing the right managed fund depends on your investment goals, risk tolerance, and investment horizon. Consider factors such as the fund’s performance history, management fees, investment strategy, and the expertise of the fund manager.
6. What are the fees associated with managed funds?
Managed funds typically charge management fees, which cover the cost of professional management and administration. Some funds may also charge performance fees, entry or exit fees, and other operating expenses. It’s important to review the fee structure before investing.
7. What is the difference between active and passive managed funds?
Active managed funds are actively managed by fund managers who make investment decisions to outperform the market. Passive managed funds, such as index funds, aim to replicate the performance of a specific market index and involve minimal trading.
8. Can I lose money in a managed fund?
Yes, like any investment, managed funds come with risks, and there is a possibility of losing money. The value of your investment can fluctuate based on market conditions and the performance of the underlying assets.
9. How are returns from managed funds taxed in Australia?
Returns from managed funds are subject to tax in Australia. This includes income distributions (interest, dividends) and capital gains. Investors receive an annual tax statement from the fund detailing their taxable income, which must be included in their tax return.
10. How can I invest in managed funds in Australia?
You can invest in managed funds through various platforms, including financial advisors, online investment platforms, and directly through fund managers. It’s important to conduct research and consider seeking advice from a financial professional before investing.
Resource : https://www.starinvestment.com.au/top-managed-funds-australia/
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