Advantages of managed funds

While there will always be a place for direct investments (for wealthy individuals, investors with special interest or ambition to self-manage, when there are special opportunities to take advantage of, and so on), managed funds make sense for most investors who are inexperienced and in any event, unable to access necessary research information or to analyse that information.

Other advantages of professionally managed funds over direct investments are as follows:

Professional management - Investors in a managed fund effectively employ professionals to act on their behalf. This is a 'hands free' investment from an investor point of view.

Cost efficiencies - due to the very enormous amounts Fund Managers deal with they effectively have a greater bargaining power than the individual investor relative to transaction costs. The costs include brokerage fees etc.; these reduced fees available to Fund Managers are passed back to the Client in the form of better returns.

Diversification - Investing in a Managed Fund allows diversification that would not otherwise be possible if investing directly. For example it would not be possible to invest $80,000 evenly over the property market and the equities market. This is simply because you would not be able to purchase a property market for $40,000. However you could achieve this allocation of funds via a Managed Fund.

Flexibility - Investing in a managed fund allows flexibility to alter your investment portfolio simply and without incurring new entry fees and brokerage cost

Liquidity - Depending on the underlying investment would determine how quickly the funds can be accessed. In most cases funds would be released within 14days. Investors can access a part of their funds or the whole amount as required.
Administration - Administration is simplified as the investor receives one cheque and one statement per managed fund instead of a number of cheques from property managers, company dividends etc.