Investor Education > Investment Basics > Investment Types
INVESTMENT TYPES
There are a number of ways you can invest:
Managed funds
Also known as managed investments - managed funds are products which allow investors to pool their money with that of other investors in order to access a broad range of investments managed by a professional team which they might not be able to access individually.
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A managed fund can automatically diversify your portfolio. |
The number of fees that can typically be paid in managed funds. |
>> Learn more about managed funds
>> Ready to invest? Browse managed investments
Superannuation
Super is about generating wealth to ensure you have enough money in your retirement. Superannuation funds give investors the option to build and create wealth with managed investments with all contributions and earnings taxed at a lower tax rate.
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It is a tax effective method for creating wealth for retirement because it receives concessional tax treatment. |
Can be subject to similar fees as managed funds and investors are usually unable to access your super money until you retire. |
>> Learn more about superannuation
>> Ready to invest? Super investments
Allocated pensions
An allocated pension is a product that provides investors with a regular income from their superannuation savings. When you retire, your superannuation savings become available via an allocated pension. Depending on your pension fund, you can usually choose between annual, quarterly, monthly or weekly payments.
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Investment earnings in pensions are tax free. You can continue to invest in managed investments to maximise your savings in retirement. |
As with all forms of managed investments, investors should beware of potential entry fees and adviser service fees. |
>> Learn more about pensions
>> Ready to invest? Account based pensions
Separately Managed Accounts (SMA)
SMA's are an alternative to managed funds. A SMA is a customised share portfolio where the underlying shares are owned by individual investors. Your investment in a SMA is allocated across one or more existing investment models which have been provided by investment specialists. Separately managed accounts can be accessed with minimum investments as low as $5.000.
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The securities in the account are visible and portable just as they would be if they had been purchased directly. |
SMAs are typically only available via an adviser who will mark up the fees on your investment. The fees can be as high as 3% per annum. |
>> Learn more about separately managed accounts
>> Ready to invest? Blue Chip 20
Master Trusts
Master trusts allow investors to access products that they might not otherwise be able to access, like wholesale funds. In a master trust the ownership of the investments belong to that specific master trust.
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They provide investors access to wider investment opportunities, including funds that investors might not be able to access individually, and advantages in administration and reporting. |
The investor may be limited to the investment options in his/her platform service and some of the investment platforms can attract high fees. |
>> Ready to invest? Invest in master trusts
Wrap accounts
Wrap accounts consolidate various investments under one administrative umbrella. A wrap account is a custodial service with investments in various assets made under an individual’s name.
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Provides the ability to invest in wholesale managed funds and direct share options – sometimes for as little as $100 per fund – and receive one consolidated tax report. |
Most wrap platforms are only accessible via an adviser and are traditionally associated with high fees. |
>> Learn more about wrap accounts
>> Ready to invest? Direct access, low fee wrap accounts
Margin Lending
Margin lending can be best described as borrowing money to invest in shares or funds. The amount lent is governed solely by the value of the cash, shares and managed funds you offer as security.
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The interest paid on the borrowed funds may be tax deductible. |
Whilst a margin loan can magnify your gains when markets are performing well, it can also magnify your losses when markets are volatile. |
>> Learn more about margin lending
>> Ready to invest? Margin loans with discounted interest rates