Investment funds
We know everyone has different goals and ambitions so we offer a selection of professionally managed investment funds enabling you to diversify your portfolio to match your investment needs.
With RaboPlus you have online access 24/7 to a range of wholesale managed funds from reputable fund managers, plus you can start investing with as little as $250.
What is an investment fund
An investment fund, also known as a managed fund, allows you to pool your money with other investors into a single fund which is managed by a team of investment professionals. This pooling of funds provides much greater investment 'buying power', allowing your fund manager to invest in opportunities often beyond the reach of individual investors.
Each time you invest in an investment fund you will be issued with 'units'. These units represent your stake in the fund(s). As the price of these units increases, so does the value of your investment, depending on the value of the underlying investments. However, nothing is guaranteed and sometimes they can also reduce in value. Remember, past performance is not a reliable guide for future performance.
Investment funds typically invest in five main asset classes: Australian and international equities, property, fixed interest and cash. Some investment funds may invest in only one of these asset classes, while others, often referred to as 'diversified' or 'multi-sector' funds, can diversify your investment by using a mixture of investments across the asset classes.
Investment funds provide many benefits
Diversification
Your risk is spread through diversification, which means you are not putting all your eggs into one basket.
As a single investor with limited investments, poor performance from a single investment may lead to a significant loss. In contrast, pooling funds with other like minded investors allows a fund manager to spread the investment mix, which helps lower investor risk. Additionally, the assets available within a managed fund allow the fund manager to invest beyond the financial capability of the individual investor.
Low minimum investment
You don't need a lot of money to construct a diversified portfolio (compared with buying shares alone), and with RaboPlus investors can start with as little as $250. Compare this with the initial investment typical of most wholesale managed funds which may require as much as $500,000 per investment into a single fund.
What is the difference between wholesale and retail funds?
Wholesale funds: Wholesale funds are investment funds that are typically tailored for larger investors. They are usually characterised by a low Management Expense Ratios (MERs) and require minimum investments greater than $100,000.
Retail funds: By contrast, retail funds are structured so they are more widely available, accept investments greater than $1,000, but are characterised by higher MERs.
Professional management
As an individual investor, you may not have the time or training to properly analyse all investment opportunities. Yet a fund manager exists precisely for this purpose, to do all the work. This translates into less stress for you as fund managers track the performance of the assets in the fund, make the decisions about asset allocation and regularly report to the investors.
Asset access
In most cases investment funds offer an ease of access not available in other types of investments. You can usually buy and sell investment funds on each business day, making it easy to get to your money invested whenever you wish.
