One way for novice investors to avoid a DIY disaster is to start a share portfolio with managed funds. A managed fund is a pooled investment.
Investors buy units in a trust structure and the money is pooled to buy authorised assets.
Depending on the fund, assets may include shares, property, fixed interest and cash. Balanced funds include assets from all these groups. Managed funds are known by several names, depending on their purpose. Unit trusts are usually set up for general investment purposes, while other managed funds such as superannuation and allocated pension funds, insurance bonds and friendly society bonds are aimed at the superannuation market. Income is typically paid to unit holders every six months.