Managed Fund - A smart investment

A smart investment?
The sad truth of the matter, is that there are very few, if any, smart investments to be made at the moment. The financial markets are in such turmoil that nothing is any longer certain, even a managed fund.

What is a managed fund?
Managed funds are a portfolio of stocks and shares that are split across several different market sectors and are managed by a fund manager who is normally a professional. The investments are spread across different sectors to minimize the risks, on the basis that whilst one particular market sector may falter, one or more of the other sectors within the managed fund will prosper. It is the job of the fund manager to keep a watchful eye on the market fluctuations and to mitigate against these movements by transferring the funds from one sector to another.

Current climate
Under normal circumstances, managed funds are a secure investment. They allow you, the smaller investor, access to funds that normally only the 'big boys' can access, but because you are part of fund which is shared between an number of fellow investors, your joint investments provide sufficient bulk to enter these otherwise prohibited markets.

Do you trust your fund manager?
The one good thing that you can say for managed funds is that you do have a market professional guiding your portfolio. He will be better placed than most to understand the prevailing market conditions and to act accordingly. The only question you have to ask yourself is where anyone, professional or not, is able to forecast what is going to happen next in these extraordinary times.

Mel C writes about a variety of subjects including managed funds and low cost managed funds