Managed funds: the good, the bad and what to look for
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This podcast contains general financial advice only. That means it's not specific to you, your needs, goals, or objectives, so don't act on the information until you've spoken with your financial advisor. You'll find our full disclosure, disclaimer, and link to our financial services guide in the show notes. Kate Campbell, welcome to this episode of the Australian Finance Podcast.
It's good to be back, Owen, in a slightly different and darker location today. I seem to have lost a few light bulbs in the moves.
Yes, you have indeed. You are recording remotely. I'm from down by the beach. I'm recording remotely from Sydney, up here doing a bunch of interviews and working on some education stuff. Today we're talking about managed funds, and managed funds are something that we should have talked about any time over the past three years because we've had a lot of questions on them. And so this has been a long time coming. Today we're going to talk about what are managed funds, how are they different to ETFs, why you would consider investing in one, the different types, how much they cost, and some of the things that you need to know before you invest. We might even run over like a quick checklist that will help you kind of navigate through and provide some examples of managed funds that are pretty accessible to people.
So maybe to start off with Kate, let's just talk about why manage funds? Why is this something that's interesting to investors?
Yeah, I think a lot of the time, especially on the podcast and in our community, ETFs are kind of the topic that we talk about at the moment, even more than individual share investing. And I think that's because it's really simple and easy to understand and they're low-cost products. But we definitely should have talked about managed funds earlier because they've been around for quite a long time, much longer than ETFs. They've kind of got a bit of a bad rap over the last few years because ETFs There is the misconception, not misconception, because in cases it is true that they do underperform things like ETFs over a longer period of time. And it's very hard for an active fund manager because instead of your ETF running,
like BDHG or A200 where a human isn't selecting the individual companies. It's via the benchmarks and it's a very passive strategy. With active funds, most of the time there are humans, analysts like Owen. Owen doesn't do this, but he could as an analyst, actually researching companies and choosing what goes in the portfolios. And managed funds aren't just share managed funds. You can have property managed funds.
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Sounds like good money advice... But is it?