Managed Funds Using a Regular Savings Plan

Many managed funds offer the convenience of a regular savings plan so you can add to your investment on a regular basis. Regular investments can often be deducted straight from your bank account.

 

Investing your savings into a managed fund on a regular basis provides the benefits associated with Dollar Cost Averaging. This means¬†that you don’t have to worry about where share prices or interest rates are headed. You simply invest a set amount of money on a regular basis over a long period of time.

 

Below is a simple example that illustrates how it works based on investing $100 per month into a managed investment that initially had a unit price of $10. Over the next few months, the market falls, (causing the unit price to drop) before recovering to its original value.

Month Investment Unit Price Units Purchased
1 $100 $10 10
2 $100 $8 12.5
3 $100 $5 20
4 $100 $8 12.5
5 $100 $10 10
Total $500   65

At the end of the 5 months you have 65 units each worth $10, so you have $650. You have invested $500, so your profit is $150 even though the unit price is the same as when you first invested.

Contact Information

 

Phone: 08 8373 7277

Fax: 08 8357 0366

Email: admin@pgfs.com.au

Facebook: PGFS

 

Quicklinks