Managed funds make investing in shares easier by pooling together over $100 million from investors and using professional managers to invest the money in a portfolio of quality shares. Investors own units in the trust and receive cash distributions from dividends and gains generated by selling their units at any time. Exchange traded funds (ETFs) are a new product that allows investment in a portfolio of the top 200 Australian companies through a single stock traded on the stock exchange, similar to the underlying index returns with slightly lower returns due to costs. Examples of ETFs that provide international diversification include funds tracking global, US, European, emerging and Chinese markets.

1. GENC3003Personal Financial PlanningAndrew Hingstonandrew.hingston@unsw.edu.auUnit 12: An easier way to buy shares

2. 2Making life easierManaged funds make investing in shares easier.They pool together $100million+ of investor’s moneyThe money is invested into a quality portfolio of shares by professional fund managersYou own “units” in the trustYou receive cash “distributions” from the fund from dividends and gains.You can sell your units at any time… more on this next week!

3. 3A special shareExchange Traded Funds (ETFs) are a fairly new product on the stock exchangeStreetTRACKS ASX200 Fund (STW) is a fund that is listed on the stock exchangeInvests in the top 200 Australian companies listed on the stock exchange weighted according to their size.Funds returns  ASX200 index returnsIn practise … slightly less due to costs of running the fundManagement Expense Ratio of only 0.286%Well diversified share portfolio with only one stock!

4. iSharesBarclays also have iShare ETFs that track world indices.They give you diversification across 50+ companies in those markets.Value is affected by Australian Dollar which adds to riskIOO – GlobalIVV – United StatesIEU – EuropeIEM – Emerging MarketsIZZ – China IHK – Hong Kong4