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.

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.