There are always opportunities to invest and your money can work hard if it’s in the right place.
But investments can be tricky, and we can’t all be a corporate trustee performing trustee work. That’s why a managed investment scheme, also known as ‘managed fund’, ‘pooled investment’ or ‘collective investment’, could be a lucrative option.
According to the Australian Securities and Investments Commission, a managed investment scheme is a collection of individuals who have pooled their money together to get an interest in an investment. The pool of money is then managed by a corporate trustee or trustee company who performs the trustee work. Individual investors have little or no control over the day to day operation of the funds or the investment.
Examples of managed investment schemes include: Film financing, share trusts, cash management trusts and property trusts.
A managed investment scheme can be effective due to the focused nature of the work. For example, there are many opportunities for investment in the Australian agricultural sectors. But unless you’re a financial analyst, a farmer, a corporate trustee, or a trustee company, spotting these opportunities, as well as the potential risks, can be tricky.
A corporate trustee performing trustee work could easily spot the combination of a lucrative investment and the potential for a future tax benefit. There are also risks involved in these investments, which a corporate trustee or trustee company could also spot.
For example: An agribusiness managed investment scheme may seem great for the tax benefits, but the realities of this sector can make predicting returns difficult. Shifting your funds around to another managed investment fund can prove to be difficult, as is pulling your money out. A corporate trustee or trustee company could spot these downsides while someone less experienced would have trouble.
So if you’re a middle income investor aged 55 plus, an agribusiness managed investment scheme may not be for you due to long-term nature of the returns.
However, a share fund properly managed by a corporate trustee diligently performing trustee work can pay great dividends. With a broad portfolio to manage and minimise risks from market fluctuations, the right equity fund in the hands of the right corporate trustee or trustee company can enjoy a steady growth over time.
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