How to Assess Your Managed Funds & Choose Your Next One

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Investing in managed funds can be a complex journey for many individuals. In our recent webinar, we unravelled the intricacies of assessing your current managed fund and making informed choices for future investments. The session was packed with insightful discussions and an engaging Q&A round with our audience. Here are the key takeaways.

Understanding the Current Landscape

Industry data reveals a surprising trend: 74% of funds return less than the industry standard benchmark, with an average underperformance of -2.53%. Furthermore, these underperforming funds charge an average fee of 1.54%, eating into investors' returns. You can use our Compare Your Fund tool to assess your own fund's performance.

Unveiling the Causes

The underwhelming performance of many managed funds can be attributed to high fees, career risk among fund managers, and the challenges of managing larger funds. These elements create a disadvantage that often leads to average returns.

Navigating Underperformance

If you find yourself with an underperforming fund, don't panic. Check your Capital Gains Tax (CGT) position before contemplating a switch. Look for comparable options in the same asset class and compare the fees. Switching or allocating new funds to a better-performing fund could be beneficial. You can view our managed funds on the InvestSMART Portfolios page.

Choosing a New Fund

When choosing a new fund, avoid the temptation of past performance. Instead, focus on costs. Diversifying your portfolio by allocating to global and ASX small-cap funds can be a smart move. Learn more about investing fundamentals in our InvestSMART Bootcamp or sign up your team for the InvestSMART Bootcamp for Business.

The Role of Managed Funds

Managed funds offer unique benefits, especially when it comes to gaining exposure to illiquid markets and assets, an area often overlooked by ETFs.

Assessing a New Fund

Consider multiple factors when selecting a new fund, including asset class, fees, size/liquidity, performance, location, and tax implications. Aiming to be average can lead to outperformance, as most professional investors can be outdone by focusing on fees and getting the index return. Remember, at InvestSMART, we offer Capped Fees.

Q&A Session Highlights

Our audience posed several insightful questions during the webinar. For more answers to your queries, visit our Help Centre.

Why Choose InvestSMART?

Join InvestSMART on a journey to financial clarity. With our diversified, capped-fee professionally managed accounts and a comprehensive Bootcamp to learn investing basics, we make navigating the world of managed funds easier. We're committed to transparency and accessibility in investing. To discover how we can help you achieve your financial goals, schedule a call with our team today.