A managed fund is a professionally managed investment portfolio that individual investors can buy into, purchasing ‘units’ rather than shares. Each managed fund has a specific investment objective. This is usually based around the different asset classes (cash, fixed interest, property and shares). The money you invest is used to buy assets in line with this investment objective.
When you invest in a managed fund, you are allocated a number of ‘units’. The value of your units is calculated on a daily basis as the market value of the assets in the fund rises and falls.
By investing in shares directly, you have complete control over where, and in what quantity, your money is invested at all times. The spread across stocks, or asset classes, can be entirely customised to suit your personal investment needs. On the downside, you as an individual investor, will have to take care of the legalities of investing, as well as tax reporting and account keeping. As an individual it is likely that the amount of money you have to invest is limited and this may mean that you cannot achieve an effective diversification to reduce risk or raise returns to your satisfaction. The extent of your personal knowledge is not as deep as the combined resources of a managed fund team of financial advisors and investment managers.
Fixed Interest Investments
Fixed income investments provide certainty and capital stability in a portfolio. A greater allocation provides greater certainty; a key requirement for many investors contemplating retirement.
Recent volatile stock market performance has highlighted the need for greater understanding of fixed income.
Dobbrick Financial Services has many resources available to help you understand and invest in fixed income including a dedicated Research Team producing specific, detailed fixed income analysis.
With wholesale access to Australian Deposit-taking Institutions (ADI’s) we can source a high returning and diversified portfolio of term deposits suitable to your portfolio and risk profile.
With wholesale access to Australian Deposit-taking Institutions (ADI’s) we can source high returning and highly liquid bank accounts which can act as the hub to your overall investment solution.
Through a wrap account your investments are consolidated in one place. This allows you to access managed funds, shares, cash and margin lending and gives you online access to view reports on your consolidated holdings. The available investment choices allow you to better diversify across asset classes and reduce risk. Wrap accounts also provide access to wholesale managed funds and ‘boutique funds’ that are often not available to retail investors as the minimum investments can be anywhere from $500 000 to several million.
Unified Managed Account, a professionally managed investment service that can accommodate every investment vehicle (e.g. Managed funds, stocks, term deposits and cash) all in a single account, all or part of the portfolio can be rebalanced regularly. The UMA provides consolidated reporting of holdings, transactions and taxation. The UMA we access is one of the most flexible, dynamic and cost efficient in the market place.
Superannuation is an excellent way to invest money for your retirement. It’s about planning a path for your future and making the most of your investment dollars to generate the income you will need once you retire. For many Australians, it is the key to a secure and financially independent retirement. If you are aged between 18 and 70 and earn more than $450 per month, your employer is generally required to contribute at least 9% of your salary to a complying super fund on your behalf, known as the Superannuation Guarantee.
Superannuation is one of the most tax-effective means of creating retirement wealth. Those who hold a super fund benefit from tax concessions that apply to contributions, to earnings within the fund and to the accumulated benefit. All contributions and investment returns are generally taxed at a flat rate of 15%, with capital gains on assets held for greater than 12 months taxed at 10%. For many people, an investment in super could outperform an equivalent investment outside super due to these tax benefits. As super is a long term investment where all earnings are reinvested and any returns compounded, the earlier you begin making decisions, the more effective your super will become upon retirement. In addition to all the tax advantages of investing in a super environment, you can access your super completely tax free after you turn 60.
A common misconception about super is that it is an investment asset but rather it is actually an investment framework within which you can invest in many different asset classes. Superannuation provides investors access to virtually the same menu of funds available outside of super all the while being taxed at a maximum 15%.
Account Based Pensions
Account based pensions, also known as allocated pensions, offer retirees a simple and flexible way of receiving their superannuation balance as a tax effective income stream. Allocated pensions have significant tax benefits if you are aged 60 and over, all investment earnings and payments from your pension account are tax-free.
Account based pensions allow you to control your retirement income by varying the amount (subject to minimum pension payment requirements) and frequency of income paid, as well as allowing you to draw a lump sum if and when you need it. You can choose how your money is invested by your chosen pension fund provider. Fund managers offer different investment options to suit your investment strategies. Most retail pension master trusts offer dozens of investment options and easy switch facilities.