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Direct investments vs managed funds
You can choose to invest directly in the financial markets or via a managed fund.
Direct investing
Direct investing generally requires large amounts of money, in-depth market knowledge, plus regular monitoring of market trends and relevant tax and legislative changes, which involves a huge amount of time on a regular basis.
Individuals may invest directly in the sharemarket or property for example.
In the case of property, this would mean taking into account many factors, including:
- Location;
- Capital appreciation expectations;
- Depreciation;
- Liquidity constraints;
- Tenancy schedule (if applicable);
- The investment environment (ie interest rates); and
- Building maintenance and management among other things.
Managed funds
The more straightforward alternative is to invest in the financial markets via managed funds. A managed fund allows you to pool your money with that of other investors, and let the experts manage your investment, monitor economic and legislative changes that affect your investment and look after most of the administrative requirements associated with your investment.
With managed funds, you still get to choose where you want to invest your money, as the majority of funds spread their investment activity across each of the asset classes.
You can keep regular track of the value of your investment, add to it at any time, and withdraw funds from your investment when needed (taxation and certain restrictions apply).
AXA offers a range of managed funds which are listed on www.axa.com.au under “Personal Products,” “Personal Investment.”
An example of a typical managed fund is AXA’s Diversified Balanced Fund which invests across all four major asset classes, with a higher exposure to growth assets such as shares and property.
Exposure across the asset classes have varying ranges:
| Asset class | Min. exposure | Max. exposure |
| Australian shares | 20% | 60% |
| International shares | 10% | 40% |
| Australian fixed interest & money market securities | 10% | 30% |
| International fixed interest & money market securities | 0% | 10% |
| Cash and cash securities | 0% | 20% |
| Property securities | 0% | 10% |
The benefits of managed funds include:
- ease of investing;
- access to your money when needed (most funds);
- ability to diversify (spread) your investments which reduces any associated investment risk;
- access to a wide variety of investments (e.g. commercial property, international shares) not normally available to individual investors; and
- low cost professional investment management.
Superannuation
Anybody that has a superannuation account already invests their savings indirectly. Superannuation funds generally appoint a range of fund managers who operate within direct investments and/or managed funds, with characteristics that suit a variety of investors.
AXA’s Super Directions for Business offers a diversity of choice:
- Five multi-manager diversified portfolios;
- Four Series II multi-manager diversified portfolios; and
- Six multi-manager sector portfolios.
Within each portfolio a variety of fund managers are appointed to manage members’ money.
For more information on the range of investment options available through Super Directions for Business go to www.axa.com.au “Business Products.”
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Further Information |
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