No need to be wary of managed funds: JB Were
Concerns investors have about managed funds, such as high costs and low returns, are unfounded, according to wealth management group JB Were.
Other major concerns investors usually have are that:
- managed funds don't pay consistent franked dividends;
- investors never know what the fund manager is doing;
- investors cannot get their money when they want it;
- the fund manager doesn't care about the investor; or
- the fund manager is unnecessary if the investor already has a diversified portfolio, JB Were stated.
However, JB Were said it was important to understand the structure of such funds, which have to distribute all profits in the year they are gained, including dividends and realised capital gains.
The eight managed funds on its approved list had at least kept pace with the benchmark over 10 years, with an average outperformance of 3.4 per cent, JB Were stated.
JB Were said that although these products could be expensive, managers were aware of fee pressures and were selected based on their ability to add value after fees.
Lack of transparency is not as much of an issue as it used to be, according to JB Were. Information is presented on JB Were's website on more than 3000 managed funds available in Australia, and there is a greater demand for transparency overall.
Access to capital is also no longer much of an issue, with 41 of 45 funds on JB Were's approved list offering daily liquidity, although a few illiquid strategies do have a set term.
Managed funds also have benefits including access to professional and experienced management teams, well-diversified portfolios and unique investment opportunities, JB Were stated.
Recommended for you
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
Fund managers are entering 2025 with the most bullish sentiment since August 2021 and record high allocations to US equities, thanks to the incoming Trump administration.
An independent expert has ruled the Perpetual deal with KKR is no longer in the best interest of shareholders in light of the increased tax liabilities.
The Australian wealth management firm has named a custodian for its MLC and OnePath businesses following an extensive tender process.
