Managed Funds are probably the least understood of the three investment classes. However, most Australians have it – such as your superannuation fund.
Your money is invested by fund managers who select the various companies they believe will perform well. Generally as a wealth creator, stocks such as international, domestic and property stocks are selected.
Your money is pooled with other investors to ‘lend’ money to these companies and they pay dividends back to you for the privilege.
You also gain from the growth of these stocks, and if you if you wish to sell some or all of your investments, you can sell most stocks within a week.
Fund managers monitor your investments continually, and will buy and sell stock to chase better returns for you. This asset class is more volatile than property, and either you have nerves of steel and monitor it daily, or check it periodically to monitor its progress.