When we ask most new clients if they know what managed funds are, most reply ‘no’. Some reply that they have a small idea, and very few are able to describe to us in detail what managed funds are.
Managed funds can become an essential arm to the overall diversification of your investment portfolio over time. In short, they’re like a turbo-charged savings plan. Or – as we describe to clients: Sort of like an ‘unlocked version of KiwiSaver’ – except there’s no employer or government contribution. Managed funds are like baskets of assets. So, instead of investing into one thing like, let’s say Telecom, you’re spreading your savings, or your risk over thousands of different assets. These assets include things like shares, bonds, cash, and commodities. So, you’re not reliant on how well one or a few companies perform in order to grow your wealth.
The team responsible for choosing which assets qualify or don’t qualify to be in the managed funds are known as Fund Managers (of course!). They are the ones that actively manage and choose the investments in the managed funds portfolios. Goodlife specifically work with one of the only ‘Active Managers’ in New Zealand – New Zealand Funds Management Limited. Most Fund Managers in NZ simply align themselves with well-known financial indexes, and rely on how well they perform, as opposed to building the funds themselves. We’ve spent many hours researching NZ Funds and their investment strategy and philosophy. Goodlife are only too happy to be aligned with what we refer to as ‘some of the best minds in the industry’.
Performance should not be the only factor looked at when choosing Fund Managers. We think risk-mitigation and diversification is hugely important as we get deeper into a financial world that is uncertain. We also like that there’s no minimum start-up capital required, and no minimum weekly or monthly drip-feed into the funds. You can essentially save whatever is affordable to you, and access those funds whenever your financial goals require you to access them.
Let Goodlife sit down with you and show you how Managed Funds can have a profound effect on your wealth creation and diversification of investments over time.