Managed funds 101

What Are Managed Funds?

A managed fund is an investment vehicle where multiple investors pool their money together, and a professional fund manager invests it in various assets such as stocks, bonds, and property. The goal is to generate returns while managing risk based on the fund’s investment strategy.

Types of Managed Funds

1. Equity Funds – Invest primarily in stocks. Can be broad-based or sector-specific (e.g., tech stocks).
2. Fixed Income Funds (Bond Funds) – Invest in government or corporate bonds, providing stable returns.
3. Balanced Funds (Hybrid Funds) – A mix of stocks and bonds for a balanced risk-return approach.
4. Index Funds – Track a specific market index (e.g., S&P/ASX 200) with passive management.
5. Exchange-Traded Funds (ETFs) – Trade on stock exchanges like shares, often tracking an index.
6. Hedge Funds – Use advanced strategies (short selling, leverage) to aim for high returns, often riskier.
7. Property Funds (REITs) – Invest in real estate assets, providing rental income and capital growth.
8. Cash Funds – Invest in short-term, low-risk assets like term deposits for capital preservation.
9. Ethical or ESG Funds – Invest based on environmental, social, and governance (ESG) principles.

Stella Ong

Markets Analyst

Stella is a markets analyst and writer with almost a decade of investing experience. With a Masters in Accounting from the University of Sydney, she specialises in financial statement analysis and financial modelling. Previously, she worked as an equity analyst at Australian finance start-up, Simply Wall St, where she took charge of the market insights newsletter sent out to over a million subscribers. At Stake, Stella has been key to producing the weekly Wrap articles and social media content.