Regular Managed Funds Investor Plan
We've developed a great product that allows you to invest a set amount of money into one or more funds on a regular basis. Setting up a regular investor plan reduces the impact of market fluctuations and can reduce the risks associated with making large one-off investments. This type of regular saving is often referred to as "Dollar cost averaging".
For only $250 you could be up and running and on your way to achieve your investment objectives.
Better still, we've reduced the entry fee to 0.50% for all regular investor plans, a saving of over 33% on our normal entry fee!
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Benefits & Features
Benefits
- Get started with just $250 a month
- Smoothes out market ups and downs
- Achieves a better average price over time
- Avoids the risks of lump sum investing
- Safer than trying to time the market
Features
- 40 + funds to choose from
- Choice of topping up with lump sums
- Ability to change fund selection at any time
- Buy and sell anytime - no lock ins or penalties
- 24/7 online access to your portfolio
How does dollar cost averaging work?
The idea is that you automatically buy less units when the market is up and more when it's down so you get a better average unit price over time.
Here's an example that illustrates how it works:
Say you invest $500 per month into a managed fund that initially had a unit price of $1.2000. Over the next few months, the market falls (causing the unit price to drop) before recovering to its original value.
| Month | Contribution | Unit price | Units purchased |
|---|
| 1 | $500 | $1.2000 | 416.6667 |
| 2 | $500 | $1.1000 | 454.5455 |
| 3 | $500 | $1.000 | 500.0000 |
| 4 | $500 | $1.1000 | 454.5455 |
| 5 | $500 | $1.2000 | 416.6667 |
| Total | $2,500 | | 2242.4242 |
At the end of the five months you have invested a total of $2,500 and you have received 2242.4242 units.
The average price of the total number of units bought during the past 5 months is $1.1149 ($2,500 / 2242.4242 units = $1.1149).
At the end of the five months, the unit price is $1.2000. If you multiply the current unit price by the number of units you bought of the past five months, the total value of your investment is now worth $2690.91 ($1.2000 x 2242.4242 units). You invested a total of $2,500 and your investment is now worth $2690.91. That's a profit of $190.91, even though at the end of the five months the unit price is the same as when you first invested.
Remember: dollar cost averaging doesn't guarantee a profit. However, with a sensible and long term investment approach, dollar cost averaging can help you to smooth out the unit price ups and downs and may help you to potentially reduce risk of loss.