When you ask someone about how to create wealth, the word 'investing' is one that will very likely pop up.

On paper, the concept of investing seems relatively simple; you put your money toward a person, company or asset, and if all goes well, you make some big bucks over time.

But there are almost innumerable ways to invest, with many turning to property investment in Auckland as an option. However, there are also other great choices, like investing into managed funds.

The Financial Markets Authority defines managed funds as "money from individual investors which is pooled and invested by a fund manager".

There are three main types of managed funds, which are unit trusts, group investment funds (GIF) and superannuation schemes. With unit trusts and GIFs, shares of assets are bought in 'units'. These can usually be sold and moved around easily.

Unless it's Kiwisaver, superannuation schemes can only be accessed after you've turned 65, when it might be time to kick back and enjoy a cool glass of not-a-care-in-the-world.

Here are a few benefits of managed funds and why they can be a terrific way to secure your retirement:

1. Diversification

Ever heard of the phrase 'don't put all your eggs in one basket'? With investing, this is generally true, and is called the diversification of risk. The great thing about managed funds is that your money gets spread over an almost limitless variety of investments across different asset types, industries and even countries.

As your portfolio will be diverse, its health will not be solely dependent on any one investment.  If a company or asset suddenly loses market value, your losses will be contained and limited.

2. Investing made simple

Investing can be a stressful ordeal as you attempt to find meaning in the walls of numbers. Sometimes, it really is best to have a pro take the reins. Managed funds are directed by (surprise, surprise) fund managers.

These professionals are experts in their field and always have ears to the ground in the investment world. They can access opportunities that the average investor may not ever come across. Fund managers are the people that will choose which assets are worth investing in and which might be worth passing on.

Furthermore, all the tiresome paperwork and administration will be done by the fund manager, making your investment journey a far less complex one.

3. Get a sweet deal

With managed funds, you have the ability to get a better deal on your investments. And who doesn't love a good deal?

Fundsource notes that many of these investment opportunities will not even be available to anyone with less than $1 million on hand. Due to this as well as other logistical challenges, private investors might have difficulty tapping into these markets.

However, your fund manager can pool together yours and other investors' money into a big sum, allowing all of you to collectively access these investments.

By having this bulk buying power, the fund manager can negotiate these transactions to make sure all the investors get the most out of their dollar than they could have on their own.

4. Anywhere, everywhere

Managed funds have the ability to tap into international markets in a way that private investors would struggle to access.

Fund managers are regularly in touch with networks and funds all around the world. This means that your opportunities aren't just limited to New Zealand, but you'll have the freedom to reach high-potential investments in searing-hot markets like China, the United States and Europe.

With such a great range at your finger tips, having the right investments for your financial goals will be far easier to take a hold of.