The world of investing can seem complex and, while lots of people have made the wise decision to join KiwiSaver to save for retirement or a first home, managed funds can be another way to grow wealth.
And it’s easier and more accessible than people might think.
Nicholas Smith, Senior Wealth Adviser at Fisher Funds, answers the key questions for people considering investing.
What is a managed fund?
“In many ways, a managed fund is quite similar to your KiwiSaver investment. Like KiwiSaver, when you invest in a managed fund, your money is pooled together with other investors’ money, and a professional fund manager invests the funds into a range of different assets, including shares, bonds and property,” says Smith.
“And, like KiwiSaver, most managed fund providers have a wide range of funds available. Some funds are going to invest in a broad range of different assets, and others are going to target a particular sector of the market, for example New Zealand shares, global bonds, or property and infrastructure investments.”
Who should consider a managed fund?
“Anyone can invest in a managed fund, but they’re particularly good for people who want to get started in investing, but don’t necessarily have the time or expertise to pick the individual companies and other assets to put inside a portfolio,” says Smith.
“Because managed funds invest in a wide range of companies and other assets, you benefit from a diversified portfolio – in other words, not having all your eggs in one basket.”
How much money do I need to start a managed fund?
You don’t need a lot of money to open a managed funds account. You can start with a small amount and then add to it when you choose to. You can set up a regular deposit if that works within your budget or invest smaller lump sums as and when you can.
Different providers might have a minimum amount you need to invest at the start, but most are not large sums.
How could a managed fund work together with your KiwiSaver account?
The flexibility of managed funds means they work really well alongside your KiwiSaver. As KiwiSaver is specifically designed to help you save for retirement or for your first home.
“However, we all have goals outside of those two ambitions in life,” says Smith.
“With a managed fund, you can invest for any reason and once you’ve reached your goal you can access your money when you need it, usually within a week. You might be saving for something like a new car or a dream holiday, or to help your kids or grandkids pay for their education. There’s lots of different things you can invest for.”
Getting started
Managed funds are investments which means their value can go up and down, so it’s a good idea to have a chat to a registered financial adviser first. They can help you set up a managed fund that aligns with the goal you’re trying to achieve, how long you’re going to be investing for and the level of risk you’re comfortable taking.
This content was sponsored by Fisher Funds.
Fisher Funds has been growing Kiwis’ wealth for over 25 years. For information on their Managed Funds visit go.fisherfunds.co.nz/managed-funds-reasons
Fisher Funds Management Limited is the issuer of Fisher Funds Managed Funds. A Product Disclosure Statement is available on their website.
