What are Managed Funds?
Managed funds consist of professional managed pools of funds that are invested into various investment vehicles such as property, shares and cash. Investors have the ability to buy units in funds, with the prices of units varying on a daily basis, as determined by a variety of fund managers. In order to buy into a fund, an investor typically outlays a minimum of AUS $1K to $5K.
[ad#Google Adsense]
History of Managed Funds in Australia
The Australian funds management industry represents one of the largest managed funds market in the world, with total funds under management of A$1.3 trillion(1) (June 2007). It has been conservatively estimated that this figure will double by the year 2015.
Why has the managed fund industry experienced such growth? There are a number of factors that explain the growth of the industry:
- an educated investor base
- mature markets,
- representation from global investment companies
- modern investment vehicles
- a fair regulatory environment
- The superannuation/pension fund system
[ad#Google Adsense]
Diversity of investment products
In the past 10 years there has been a growth in the number of alternative investments in Australia:
Hedge funds
Australia’s hedge funds industry has approximately A$70.3 billion in funds under management. Industry analysts expect this to grow strongly over the next five years as institutional investors, especially superannuation funds, seek to increase their allocation to the sector
Infrastructure investment
These funds seeks total return from both capital appreciation and current income through investing in a portfolio of infrastructure securities.
Listed property trusts
A listed property trust (LPT) is a collective investment vehicle that owns a portfolio of real property. Listed property trusts are quoted on the Australian Stock Exchange (ASX), which allows investors to purchase an interest in a professionally managed portfolio of commercial real estate
Unlisted property trusts
an unlisted property trust is similar to the above, however is not listed on the ASX
[ad#Google Adsense]
Private equity
Private equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange such as the ASX
Australia has a rapidly growing private equity sector, spanning de-listings of large listed companies through to grass roots investment in venture capital. In recent years, the Australian Government has introduced a number of far reaching changes to the tax treatment of venture capital investments, with the goal of enhancing the industry’s international competitiveness
