5 Reasons Why Managed Funds Outperform Individual Assets in Investing

Investing your money can be a daunting task, especially if you are new to the investment world. One question that often arises is whether it’s better to invest in individual assets or managed funds.

While both options have their advantages and disadvantages, in this article, we will explore the benefits of investing in managed funds over individual assets.


What are managed Funds

Managed funds, also known as mutual funds, are investment vehicles that pool money from multiple investors to purchase a diverse range of assets such as stocks, bonds, and real estate. The fund is managed by a professional fund manager who makes investment decisions on behalf of the investors.


Actively or Passively Managed

Broadly speaking, there are two types of managed funds. Actively managed funds and passively managed funds. Actively managed funds are managed by a professional fund manager who actively buys and sells assets to try and beat the market and achieve higher returns. Passively managed funds, on the other hand, track a market index and do not try to beat the market. 

While both actively managed funds and passively managed funds have their advantages, actively managed funds generally charge higher fees and offer higher returns, greater flexibility, and better risk management.


Here are some of the advantages of investing in managed funds:

  1. Diversification
    Diversification is one of the most important concepts in investing. It involves spreading your investments across a range of different assets to reduce the risk of loss. Managed funds provide diversification by investing in a broad range of assets, which helps to reduce the risk of any one asset or sector underperforming. This means that if one investment in the fund performs poorly, the impact on the overall performance of the fund will be minimized.
  2. Professional Management
    Managed funds are managed by professional fund managers who have the expertise and experience to make investment decisions on behalf of the investors. These fund managers have access to research, analysis, and tools that individual investors may not have, which allows them to make informed investment decisions. This means that investors can benefit from the expertise of professional managers without having to make investment decisions themselves.
  3. Lower Costs
    Investing in managed funds can be more cost-effective than investing in individual assets. This is because the costs of buying and selling individual assets can be high, particularly for small investors. Managed funds, on the other hand, benefit from economies of scale, which means that the costs are spread across a large number of investors. This results in lower costs per investor.
  4. Liquidity
    Managed funds are generally more liquid than individual assets. This means that investors can buy and sell their investments in the fund more easily than if they owned individual assets. This is because managed funds are traded on exchanges, which means that investors can buy and sell their investments in the fund at any time during trading hours.
  5. Convenience
    Investing in managed funds is convenient for investors who do not have the time, expertise, or inclination to manage their own investments. With managed funds, investors can simply choose a fund that aligns with their investment goals and leave the investment decisions to the fund manager. This makes investing in managed funds a convenient option for many investors.


In conclusion, investing in managed funds has several advantages over investing in individual assets. Managed funds provide diversification, professional management, lower costs, liquidity, and convenience, making them an attractive option for many investors. However, as with any investment, it’s important to do your research and choose a managed fund that aligns with your investment goals and risk tolerance.

Patrick Woodcraft - Wholesale Investment Specialist Profile

About the Author: Patrick Woodcraft

As a wholesale investment specialist, I help Certified Financial Planners and Qualified Financial Advisors with the information and education they need about investment funds that are poised to perform best for their clients through the volatile economic seasons ahead. Book a free 15 minute discovery call with me to see what value I can bring to your business and establish if we’re a good fit to work together.



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