The service uses CHESS, ASX’s world-class electronic settlement system, to automate and track the process of buying (applying for) and selling (redeeming) units in these managed funds.
Investors’ holdings in these funds (‘mFunds holdings’) are held electronically and can be linked to the same Holder Identification Number (HIN) used to hold other investments transacted through ASX, such as shares.
What is an mFund product?
An mFund product is an unlisted managed fund admitted through the ASX Operating Rules and available to investors/ advisers through the mFund Settlement Service. The ASX rule framework supports the mFund Settlement Service by ensuring all parties, including stockbrokers, issuers and unit registrars are accountable for their roles and responsibilities.
A diversified portfolio can reduce the level of investment risk by minimising the impact of poor performance by a particular industry or industry sector.
Potential wealth generation and wealth preservation
A well-chosen managed fund, used individually or in conjunction with other investments, can create a portfolio to assist your efforts to generate and protect your wealth.
Investing in a managed fund is as affordable as investing in shares. You can start investing with a relatively small amount, adding to it cost effectively over time.
Access to a range of assets through specialised funds
Managed fund products can provide access to assets that may assist with portfolio diversification. These are assets in which individual investors may not normally be able to invest, due to financial limitations and restricted access to markets, research, information or insight to performance (especially for small or micro-cap stock or those within emerging markets).
While investing in managed funds provides access to different asset classes and industry sectors, there is always a risk that the managed funds’ investments may underperform or decline in value. This will affect your return.
Asset class risks
Certain asset classes that managed funds hold may carry their own risks. For example, if a fund invests in international shares, its value may be affected by currency fluctuations.
Some managed funds invest in specialised areas in an attempt to exploit potential high-growth opportunities. You may be taking on extra risk if you invest in a fund focused on a narrow section of the market.