Every time you put money into a managed fund, you’re actually buying units in that fund. The price of these units is generally calculated daily and is based on the changing value of the Managed Investments Australia, such as shares, owned by the fund. Returns, or earnings, from managed funds, can be divided into two parts – distributions and unit price growth.
Distributions are the payments you get during the course of your investment. They’re made up of the earnings the fund has made over the period. These earnings can include capital gains or income.
As the value of the fund’s investments rises and fall so too does the value of your fund’s units. If your units become worth more than you paid for them, that’s called unit price growth.
There are two ways you can Investing in Managed Funds:
1. you can invest a lump sum and leave it to accumulate – adding amounts whenever you can
2. you can invest a lump sum and then regularly add amounts – usually monthly payments of as little as $100
2. you can invest a lump sum and then regularly add amounts – usually monthly payments of as little as $100
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