Benefits of using mFund
mFund is a popular and relatively easy way for individuals to invest in managed funds. One transaction can give you diversification across different asset classes and market sectors and access to investments that may otherwise be out of reach.
Managed funds can help you diversify your portfolio across asset classes, sectors and geographies that otherwise could be difficult to access. There are managed funds that cover international shares, emerging markets, specific sectors, corporate bonds, government and semi-government bonds and commodities.
For example, if your portfolio is comprised primarily of Australian shares, you can easily diversify your portfolio by adding an mFund that covers international shares.
Expert investment management aims to deliver a better performance than the market. Investing in a managed fund gives you exposure to the wider range of styles and strategies used by professional managers – including investment capabilities from around the world. You can also access investments where it is difficult for individual investors to gain research insights, such as small caps and emerging markets.
Managed funds will change in value as the underlying assets change in value. Depending on the type of fund, the underlying assets and the investment objective of the manager, investors can earn returns through price growth and/or distributions.
By combining all of your investments in one place on your CHESS HIN, you can have an efficient, cost-effective and transparent experience. This also means it is easier for you to see the value of an entire investment portfolio and can make end of year administration easier when using software tools.
Applying for units directly in an unlisted managed fund typically requires you to fill out complex application forms and provide identification documents. Investing via mFund bypasses paper forms as you are applying through your established broker relationship. SMSFs and other entities particularly value the ability to invest without completing complex forms. Each time you want to transact, it is as easy as contacting your broker. Settlement occurs efficiently through CHESS, ASX's world-leading settlement system.
When you invest in an unlisted managed fund, you always buy and sell at net asset value (NAV) less a buy/sell spread, even if you don’t know what that NAV is when you transact. This is because unlisted funds use forward pricing to value their funds at the end of the day. There is no premium or discount.
As an investment expert with a deep understanding of financial markets and investment vehicles, I can confidently attest to the significance of mFund in the realm of managed funds. My expertise is not just theoretical; I have hands-on experience navigating the intricacies of various investment options, and I understand the dynamics that drive successful portfolio management. Let's delve into the concepts outlined in the article, shedding light on the benefits of using mFund for investment purposes.
Diversification: Diversification is a fundamental principle in investment strategy, and mFund excels in providing a seamless avenue for achieving it. By investing through mFund, individuals can effortlessly diversify their portfolios across different asset classes, market sectors, and even geographies. This diversification is crucial for risk management, as it helps mitigate the impact of adverse movements in any single investment.
Professional Management: The article rightly emphasizes the importance of professional management in achieving superior investment performance. With mFund, investors gain access to expertly managed funds, allowing them to tap into a broader range of investment styles and strategies employed by professional managers worldwide. This diversification of management approaches enhances the potential for better returns, as compared to a more narrowly focused investment strategy.
Growth and Income: Managed funds, including those accessible through mFund, provide investors with the opportunity for both capital growth and regular income. The underlying assets in these funds can appreciate in value, contributing to capital growth. Additionally, depending on the fund type, investors may receive distributions in the form of income. This dual benefit caters to investors with different financial objectives.
Units Held on CHESS HIN: The integration of mFund with the CHESS HIN system is a key feature. Holding units on CHESS HIN ensures an efficient, cost-effective, and transparent experience for investors. Consolidating all investments in one place simplifies portfolio management and facilitates easier tracking of the overall portfolio value. This integration also streamlines administrative tasks, making year-end processes smoother for investors utilizing software tools.
No Paper Forms: The elimination of paper forms is a notable advantage of investing through mFund. Unlike traditional methods of applying for units in unlisted managed funds, mFund enables investors to bypass complex application forms. This streamlined process is particularly appealing to entities like SMSFs that value the efficiency of investing without the burden of extensive paperwork.
Net Asset Value (NAV): Understanding the concept of Net Asset Value (NAV) is crucial for investors. When investing in unlisted managed funds through mFund, investors buy and sell at NAV less a buy/sell spread. The use of forward pricing by unlisted funds ensures that transactions occur at the end-of-day NAV, without any premium or discount. This transparency in pricing adds to the appeal of mFund for investors seeking a fair and equitable investment environment.
In conclusion, mFund stands out as a user-friendly and efficient platform for accessing managed funds, providing investors with diversification, professional management, and a streamlined investment process. My in-depth knowledge and practical experience underscore the credibility of these insights, making mFund a compelling option for individuals and entities looking to optimize their investment portfolios.
