There are different types

Managed funds may have a general focus and be described as defensive, conservative, balanced, growth or aggressive funds. Or they can be focused on a particular type of investment or market such as shares, commodities, or emerging markets. It’s a good idea to choose the kind of assets or markets we want to invest in first and then find a suitable fund manager that specialises in that type of fund. When we invest in KiwiSaver, we’re putting our savings into a type of managed fund

There are different types

Managed fund prices will often rise in value over time, giving investors a capital gain. There is a risk that the price of a fund can drop below what we paid for it. The risk of losing all our investment can be smaller than if we personally invested in shares in one company, because our money in the fund is spread across many different assets and organisations. There is also a risk that the various management and administration fees charged by a fund will reduce our returns. Fees can vary greatly between different fund managers and between different types of funds. There’s more on the Financial Markets Authority website about fees and how to protect ourselves when investing in managed funds.