17.17 Managed funds Investment companies offer a variety of managed fund products to clients. These are designed to meet the different risk, return and investment horizon preferences of individual investors. In addition, some cater for interests in specific investment classes, while others offer multiclass products such as diversified funds. Your task here is to obtain detailed information from a major Australian fund manager in relation to its retail managed funds. This information is usually available on the company websites (try Macquarie Bank, Colonial First State, MLC or Bankers Trust). Once you have this information, write a report that details the range of products available, the investment strategies of each, the past performance of each and the particular characteristics of each (e.g. entry, exit and ongoing fees, minimum deposit requirements, ability to switch). Finally, comment on how you would allocate a $20 000 investment portfolio across these funds and why.

Refer students to the company websites to obtain details required for the managed funds. For example, MLC offer the following range of products:

• from own funds:
  • multi-asset portfolios (MLC Inflation Plus, MLC Horizon, MLC Index Plus)
  • Asset class funds (Australian shares; global shares; fixed income and property)
  • Cash and term deposits (MLC Cash fund)
• from external funds: a range of options are available.

Investment strategies include:

• MLC Inflation Plus: targets returns above inflation, regardless of what global markets are doing.
• MLC Horizon: a range of actively managed portfolios designed to deliver returns above their benchmarks, while managing risk. Each has a different allocation of growth and defensive assets, which are expected to deliver different levels of return while exposed to different levels of volatility.
• MLC Index Plus: low-cost, diversified investment solutions, plus more. Each portfolio gives your client access to returns from investment markets through an intelligent blend of index and active investment strategies. Theyre invested across a wide range of assets in and outside Australia.
• Asset class funds: uses an asset class fund from MLC or one of their specialist investment partners. These funds invest in one type of asset only.
• MLC Cash fund: aims to provide competitive returns relative to the Reserve Bank of Australia's cash rate target.

Past performance for MLC Cash Fund:

• 27/12/17 1.43% p.a.; 28/12/16 1.39% p.a.; 28/12/15 1.83% p.a.
• Check website for past performance of other funds.

Particular characteristics (entry, exit and ongoing fees, minimum deposit requirements, ability to switch

• MLC Cash Fund incurs a 0.25% investment fee
• Check the website for particular characteristics of each fund.

Students decisions on how to invest $20,000 would depend on their investment strategy and tolerance to risk. Some may opt for a diversified portfolio, while others may be risk takers and seek a higher return while some may opt for a cash fund with less risk.