Investor Education

What is a managed fund?

What is a Managed Fund?

A Managed Fund is a ‘registered managed investment scheme’, which is a type of unit trust.

By using a managed fund, investors’ money is pooled together and is used by the investment manager to buy investments and manage them on behalf of all investors in the fund. By pooling funds, investors can gain access to investment opportunities that they may not be able access if acting on their own.

Being a unit trust, when an investor invests in a managed fund they are assigned units proportionate to the amount of money they have invested. A managed fund is open ended, meaning that new units are created as investors join the fund and units are cancelled as investors redeem.

There are a number of different roles that are performed in a managed fund by different entities. These include a responsible entity, investment manager and custodian.

A Responsible Entity performs the role similar to that of a trustee in a trust. They are responsible for overseeing the operations of the fund, monitoring the fund’s investments and market performance, and making sure the managed fund pays it operating costs and tax. They may also act as the fund’s investment manager or they may appoint a third party investment manager.

The Investment Manager is responsible for selecting and managing the assets of the managed fund.

Finally, the Custodian is an independent financial institution that physically holds the underlying investments of the managed fund. The custodians act as an important check for managed funds because they help insulate the managed fund from fraud.

Managed funds are an easy way for investors to gain access to a professionally managed portfolio of both local and global stocks.

At Magellan, we have five unlisted managed funds available to investors.

In global equities, we offer three funds including the Magellan Global Fund, which gives investors access to a portfolio of actively managed global stocks without currency hedging, we then have the same global portfolio available to investors, but with full currency hedging in place and this is the Magellan Global Fund (Currency Hedged). We also offer the High Conviction Fund, which is a concentrated global portfolio of between 8 – 12 global stocks that has active currency hedging in place.

In infrastructure, we offer two funds. These are the Magellan Infrastructure Fund which gives investors access to a portfolio of actively managed infrastructure stocks that is currency hedged and the Magellan Infrastructure Fund (Unhedged), which is the same portfolio only it is not hedged for currency.

To access Magellan’s unlisted funds, investors will need to complete and return an application form and the applicable Common Reporting Standard forms, together with a cheque or electronic funds transfer.

To understand how a Managed Fund works, it’s important to understand some terminology that is used in reference to unlisted products. Please click on our other videos to learn more and ensure that you read the Product Disclosure Statement applicable to a fund before making a decision to invest.

Important Information: Units in the fund(s) referred to herein are issued by Magellan Asset Management Limited ABN 31 120 593 946, AFS Licence No. 304 301 (‘Magellan’). This material is issued by Magellan and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should read and consider any relevant offer documentation applicable to any investment product or service and consider obtaining professional investment advice tailored to your specific circumstances before making any investment decision. A copy of the relevant PDS relating to a Magellan financial product or service may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au.

Past performance is not necessarily indicative of future results and no person guarantees the future performance of any fund, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. This material may contain ‘forward-looking statements’. Actual events or results or the actual performance of a Magellan financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

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