Fund performance
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Diversification is an effective strategy to manage risk. Managed funds offer several ways to diversify your investments to manage risk:
| By asset class | There are six main classes you can invest in via managed funds - International shares, Australian shares, International fixed interest, Australian fixed interest, listed property and cash. |
| By country or region | Australia makes up only 2% of the value of the world's markets. International markets offer immense opportunities for greater diversification. |
| By industry or sector | Certain market conditions are more favourable for some sectors than others eg. The mining sector may be booming while agriculture is struggling. Banking and Finance might be steady while Information Technology is taking off. |
| By individual security | There are thousands of companies, bonds and properties to select from. Investing in one or handful of individual securities is a lot more risky than investing in a wide range of them. |
| By investment manager | Investment managers have their ups and downs and use different management styles to manage their portfolios. So it makes sense to diversify by investing with more than one. |
| By management style | Investment managers have different styles for deciding what to invest in: Growth: targeting companies with earnings growing faster than the market average - typically rewarded with a higher share price. Value: targeting shares temporarily priced below their intrinsic long-term value. Core: targeting shares based on their relative merits - underlying worth, long-term profitability and growth potential. |
General advice on this website has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, consider its appropriateness. Consider our disclosure documents, which include Product Disclosure Statements (PDS) for some products. The PDS is relevant when deciding whether to acquire or hold a product. View our Australian Prudential Regulation Authority Registrable Superannuation Entity (RSE) Licence & Registration numbers.
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