mFund is an ASX product that allows investors directly invest in unlisted managed funds across number of managed fund provider.
It allows individual investors to aggregate their managed fund exposure and portfolio in one place through mFund service on the online broker. From an managed fund provider perspective, it enables greater exposure and access to investors.
Managed funds are professionally managed investment funds that gives individual investors exposure to specific asset classes like bonds, diversified portfolio or international exposure either on a regional, country or sector exposure (developed or emerging market).
Difference between managed funds and exchange traded funds
- Managed funds are an unlisted product. mFund provides a centralized market but it is still an unlisted market where entry and exist are carried out at the end of the day.
- Exchange Traded Funds on other hand offers investors an intraday liquidity. Investors can buy or sell the ETFs when the market is open.
- Downside of this is that the price of the ETF could vary to the underlying net asset value of the fund.
- Fees are typically higher in managed fund products simply due the active nature of the fund strategies. ETFs are passive investment vehicles.
Like the listed corporate bond XTBs, mFund is a positive development in the market that meet the needs of specific investors.