RSS feeds
Features
Strategies
How managed funds compare
| Let's look at the big picture. Say you have made a decision to invest and you're shopping around for the best option. How do managed funds stack up against the competition? Check the pros and cons of managed funds and some other common investments. |  |
| Managed funds | Bank | Direct property | DIY shares |
|---|---|---|---|
|
Diversification Low start-up costs Expert management Regular investment options Potential to earn income or to reinvest Potential for high returns Choice of Strategies at different levels of risk |
Can start with very little Low risk Low cost Simplicity and ease of maintenance Liquidity Best suited to short-term savings |
Potential for high returns if market goes up Best suited to long-term goals Potential income source from rent Potential gearing and tax benefits |
Low start-up costs Potential for high returns High degree of control over investment Generally stays ahead of inflation over the long term Dividend reinvestment |
| Managed funds | Bank | Direct property | DIY shares |
|---|---|---|---|
|
Set-up fees around 4% on joining Ongoing costs around 2% per annum Possible exit fees May not be liquid |
Bank fees Low rate of return Fees may apply if cashing out early on a fixed-term account Returns may be eroded by inflation |
High start-up costs Around 10% deposit required up front Lack of liquidity Lack of diversification Enforced sale to release cash could result in loss |
Limited ability to diversify Subject to market forces Subject to high risk Brokerage fees on share trades |
| Find out more about investment |
| Download a copy of 'Investing made easy' (PDF
1.73MB). Find a financial adviser using BT's Adviser Referral Program. Learn about BT's managed funds. |