So you’ve done some research on all the different investment options available to you and decided on investing in a managed fund. Now it’s time to choose one and you are faced with so many options again. How do you narrow it down? Here are some tips to help you find the right fund to suit your needs.

Be clear on the reasons why you are investing.

It is important to know within yourself what you are trying to achieve with your investment.

What is your objective? Do you want to grow your capital in the long term or do you want a regular income to help cover your daily living or lifestyle expenses? Once you are clear on this you can then look for funds that have the same objectives as you. Check out the funds’ performance measure, or benchmark then look at the funds long term performance to see if it has been delivering above its benchmark and reaching its intended goal, therefore meeting its (and your) investment objective.

What are the features/terms and conditions of the fund?

Different funds have different features, these include such things as: minimum investment time frames and balances, income distribution frequency, redemption periods and cut-off times and methods for submitting investment applications and redemptions. Make sure the features of the fund you choose work with your life and how you want to receive funds and transact. For example if being able to access your balance and transact online 24x7 is important, make sure you find a fund that has that capacity.

Do you know what assets the fund is invested in?

All funds have an investment policy and specify ranges where they invest in certain assets as well as using different risk management tools. For example, diversification is stressed as an important risk management tool in TPT Wealth’s investment policies. Each fund invests in a diversified portfolio of assets across a range of asset types, economic sectors, borrowers and counter parties.

Does the company have a good reputation?

Have a look at the history of the company and also talk to people that may have dealt with them in the past. What were their experiences and are they happy with their investment decision? If an investment company has been around for a long time and has experienced solid performance, this is a good sign and possibly a positive indicator of future performance.

How did the Funds fare through the GFC?

This is a telling indicator of careful management and experience, how an investment management business navigated the GFC. Do some digging and see if you can find out how the company has performed through ups and downs in the past – did funds close or survive through these volatile periods? This will demonstrate consistency, longevity and also demonstrate how careful management, diligence and taking personal responsibility are important and working in the best interests of all customers.

Where do I find all of this information?

Your first port of call is the company website. Here you should be able to find high level information including the Funds returns and key features. To delve deeper in to the detail check out the Product Disclosure Statements (PDS) for each of the Managed Funds you are interested in and if you are really keen, have a look at the company’s annual reports.