Types of listed products:
Exchange Traded Managed Funds (ETMFs)
An ETMF is a listed, actively managed portfolio of assets with access to live market pricing and the ability to buy and sell the Fund’s units in the secondary market as easily as any other ASX-listed security. A number of fund managers have taken a successful managed fund and issued a listed version of it.
As with any other security, a broker places an order for units in an ETMF and executes at a known price.
Managed funds versus exchange traded managed funds
|Exchange Traded Managed Funds||Managed Funds|
|Pricing||Generally priced every 15 seconds, with the price available online||Each day’s buy and sell price is struck the following business day|
|Accessibility||Online transaction and execution||Involves a lengthy application form|
|Transacting||Investors buy or sell units in the secondary market||Paperwork required for additional investment or withdrawals|
|Minimum investment||Stipulated by your broker – for example, OpenMarkets has a minimum of $500||$25,000 is an average figure|
|Settlement||Settlement occurs via CHESS like any other exchange traded security; holdings are recorded on the investor’s HIN||Units are issued, and investors receive a standalone transaction statement|
|SMSFs||Simply transact using the Fund’s HIN||Most fund managers require sight of trust deed, birth record and other paperwork|
As with ETFs, market makers are used to issue and redeem units, and ensure a tight price range around the Fund’s net asset value. ETMFs make investment a level playing field; all investors can access a diversified portfolio of securities in the listed environment, and with a relatively small outlay.