Managed Funds – Why You Need Professionals

Managed Funds Why You Need Professionals

Good professionals should not only take the leg-work out of managed funds research and selection. Their expertise can also help guide an investor through potential caveats, in addition to highlighting potential attractive investment opportunities.

Research

Familiarising yourself with the vast array of managed funds available is an impossible task. Just picking one and hoping for the best is also not a wise strategy. A managed fund professional should be able to narrow down and provide you with a small handful of the best managed funds, from which to choose. He or she should also be able to explain the relative merits of each.

Breaking Down Jargon

The financial world is full of jargon. Collateralised debt obligations, long-short strategies, vulture funds. A good financial adviser should be able to break down financial jargon for the layman. If more "sophisticated" managed funds are deemed appropriate, then your adviser should also be able to clearly articulate the fund's strategy and investment philosophy.

Risk Reduction

A managed fund professional can help guide you away from overly risky or inappropriate investments. They can also recommend strategies that actually reduce your overall risk, such as finding funds that complement your existing investments, or funds that are quite diversified themselves.

Diversification

"Don't put all your eggs in one basket". It's an old saying, but it's very appropriate for investing. Managed funds can complement your existing property assets. Similarly, a managed fund itself is made up many smaller investments. Further still, a diversified fund might give you access to investments in local equities, international equities, property, bonds, commodities and so on. The more diversified your investments are, the lower the potential for volatility.

Access to Global Markets

Buying Eastern European shares, or trying to gain exposure to high growth Chinese technology companies on your own can be a difficult, time consuming, and often expensive exercise. An investment professional can find suitable funds for the international exposure you may be seeking, eliminating such problems.

Access to Different Asset Classes

Managed funds can be broad based investments, or may have a very narrow specific investment strategies. A broad based fund may give you access to shares, bonds and property. More specific funds might have a narrow focus such as commodities, or just one commodity, like gold. Others might just focus on commercial property.

Tailored Financial Solutions

A professional can find appropriate investments for your personal situation and investment outlook. A passive "index" fund that aims to mirror the performance of a certain index (eg the ASX100) is a simple product that may be appropriate to an investor looking for general stock market exposure. An investor that has a view that Asian economies are due to outperform may be interested in an Asian specific fund. There is literally a whole world of investment options, but a good financial professional can filter this down to the managed funds most appropriate for you.

Consistently profitable share trading by individuals requires substantial knowledge and expertise. Using an industry professional can provide just this, along with the other added benefits mentioned above.

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