The ability to apply a DIY approach to investing means that every person is empowered to find a style and strategy that meets them where they’re at. For some people, this means regularly readjusting their portfolio and checking in to see what market opportunities may exist on a day-to-day basis. For others, it may make sense to take a more passive approach and to allow someone else to make the decisions of what to buy and when to adjust their holdings. A lot of people find that they fall somewhere in between the two.
No matter where you find yourself, you are likely to, at some point, consider including managed products as part of your overall investment strategy.
The benefits of having a portion of your portfolio managed
- Time and effort:
Having a reputable asset or fund manager provide you with a tried and tested strategy means you can be way more hands off, while still having the power of choosing which funds, and how much of them, are suited to your needs. Someone else is evaluating the market, making adjustments to your holdings, and rebalancing constituents on your behalf which means less time and homework is needed from you.
- Diversification:
A managed investment portfolio will typically invest in a variety of different assets, such as stocks, bonds, and cash. This diversification can help to reduce your risk by spreading your money across different asset classes and companies.
- Learning from the best
If you’re new to investing, observing the strategy and investment choices made by a manager could go a long way in helping you upskill yourself on how you may want to manage your own portfolio.
Types of managed products
- Unit Trusts: A unit trust is a pooled fund, which means that it allows a group of investors to combine their cash and invest it. Think of it like going in on a group gift. The fund is run by a fund manager, whose aim is to grow the overall value. There are household brands with tried and tested portfolios available to you to invest in with any amount you like.
- Exchange Traded Funds (ETFs): These are a collection of different stocks (and sometimes other investment categories) that track an index or theme and can be bought in one transaction. Local and international ETFs include those from major providers like Vanguard, Blackrock, and Fidelity in the US.
- Ready-made portfolio: This is a bespoke portfolio put together by an asset manager, who receives a fee in return.
Auto-investing
When you have a regular investment plan, it is easier to stay on track with your wealth-building aspirations. You don't have to think about it every month, and you won't be tempted to spend your money on other things.
If you are looking to take a more passive investing approach in your portfolio, you can set up a recurring investment which will allow you to auto-invest into any stock or managed product from your free cash or directly from your bank account.
