If you want to invest in shares, you can choose to buy the shares yourself using a broker, or invest in a managed fund where a fund manager invests in and manages a portfolio of Australian shares. You can buy a passive exchange-traded fund (ETF), or index fund that seeks to replicate the share market’s performance, or an actively managed share fund that aims to beat this performance.
Buying your own shares puts the onus on you to select the shares, which you may not have the expertise – or time – to do. Using an actively managed share fund means taking the risk that the fund manager fails to beat the market performance. Using a passive fund means that you are likely to own a mix of shares that track the performance of a particular market or index, which will include both the bad performers in the market as well as the good performers.
Add to this the fact that in a managed fund, you don’t have a beneficial interest in any particular shares. Rather, as an investor in the fund, you are issued units that give you a fixed beneficial interest in the assets of the whole fund. Managed funds operate as a pooled fund and so the shares are pooled together and as they are bought and sold and realised, capital gains and losses are shared with all those who hold units in the fund.
This means that the tax consequences when the fund sells shares may become your consequences: you may effectively inherit a proportion of capital gains arising from the activity of other investors when they withdraw their investment.
It can be a dilemma for investors, but a modern solution is a managed portfolio.
In a BT Managed Portfolio, you are the beneficial owner of the shares in your portfolio, and any capital gains will specifically relate to your activity.
The BT S&P/ASX 20 Shares Portfolio is a simple way to get share market exposure to the 20 largest companies on the Australian Securities Exchange (ASX), by market capitalisation. This diversifies you across a range of industries such as banking, insurance, biotech, mining and petroleum, packaging, retailing and infrastructure, with both domestic and global revenue streams. With a minimum investment of $5,000*, getting started is easy.
The BT S&P/ASX 20 Shares Portfolio aims to deliver similar returns to the S&P/ASX 20 Index before fees.
The S&P/ASX 20 Index covers almost half of the market capitalisation of the Australian share market. This means this managed portfolio option can be used to provide cost effective, passive exposure to the Australian share market.
The BT S&P/ASX 20 Shares Portfolio may also be used in conjunction with other investments, for example to:
Looking for more information about managed portfolios? With BT Invest, you can access intelligent technology, tools and reports to help you invest no matter your level of experience or wealth. Find out more.
* Additional administration and broker fees apply. Please refer to the BT Managed Portfolios product disclosure statement for risks associated with small balance portfolios.
This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to your personal objectives, financial situation and needs having regard to these factors before acting on it.
BT Portfolio Services Ltd ABN 73 095 055 208 AFSL 233715 (BTPS) is the operator of BT Invest. BT Funds Management Limited ABN 63 002 916 458 AFSL 233724 (BTFM) is the issuer of BT Cash. Westpac Financial Services Ltd ABN 20 000 241 127 AFSL 233716 (WFSL) is the issuer of BT Managed Portfolios (together, the BT Invest Products). An Investor Guide is available for BT Invest and a PDS is available for BT Cash and BT Managed Portfolios and can be obtained by calling 1300 889 635, or visiting bt.com.au. You should obtain and consider the relevant disclosure documents before deciding whether to acquire, continue to hold or dispose of interests in the BT Invest Products.