What are Managed Funds?

A managed fund (unit trust, superannuation scheme) is an investment product where investors' funds are pooled and managed by a fund manager. The fund manager will invest the money according to the Trust Deed in such a way as to maximise investors' returns while only investing in the sectors that they are authorised to.

Managed funds are a very good way of accessing those sectors in which investors do not have expertise, or the means to invest directly.This is especially true of InternationalEquity / Emerging Markets Funds where it is unlikely an investor will have the expertise to invest directly.

There are two major vehicles for managed funds in New Zealand:

• Unit Trusts: These generally make distributions, which are treated as income of the investor. Unit trust investments can generally be redeemed at any time.
• Superannuation: Superannuation funds generally pay 33% tax, but do not make distributions, so there is no income for investors. Investors get a return by the increase in the value of units. Superannuation funds generally cannot be redeemed until after a pre-determined age (eg 50).

There are two main investment strategies:

• Active Fund Managers have discretion to invest as they see fit. Active Funds may underperform or outperform their relevant benchmark.
• Passive Fund Managers invest according to the relevant index, and by their nature will always underperform the index after fees are deducted.

To browse our extensive collection of Managed Funds please click this link to be taken to our Fund Power Search page>>>
Select the "FREE Entry" option from the Entry Fee box and all Funds that we offer as FREE Entry will then be displayed.