In a landscape where access, cost, and performance matter more than ever, commingled funds are emerging as a critical tool for Australian investors. Whether you’re a superannuation fund trustee, a financial adviser, or a savvy individual investor, understanding commingled funds could unlock new potential for your portfolio in 2025.
What Are Commingled Funds and Why Do They Matter?
Commingled funds pool money from multiple investors—often superannuation funds, institutional players, and high-net-worth individuals—into a single investment vehicle. Unlike traditional managed funds or ETFs, commingled funds are typically not listed on public exchanges and have tailored access requirements. Their core advantage is scale: by aggregating assets, they can access investment opportunities and fee structures unavailable to individual investors or smaller funds.
- Types: Commonly used structures in Australia include wholesale managed investment trusts and pooled superannuation trusts (PSTs).
- Who invests? Major super funds, insurance companies, charities, and sophisticated individual investors.
- Why now? 2025’s regulatory reforms, lower fee pressures, and a push for greater transparency are making commingled funds more attractive and accessible than ever.
2025 Regulatory Updates: How Policy Is Shaping Commingled Funds
This year, the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) have enacted several changes affecting the commingled fund landscape:
- Fee Disclosure: All commingled funds must provide enhanced, standardised fee reporting, closing a longstanding transparency gap. Investors can now compare costs and performance across funds more easily.
- ESG Integration: New rules require funds to disclose their environmental, social, and governance (ESG) strategies and exposures in line with the Treasury’s 2025 Sustainable Finance Roadmap. This is prompting many commingled funds to integrate climate risk and social criteria into their portfolios.
- Liquidity Management: Following recent global volatility, commingled funds must now demonstrate robust liquidity management frameworks, especially when holding illiquid or alternative assets.
These shifts mean commingled funds are not only more transparent but also more resilient and responsive to modern investor demands.
How Commingled Funds Fit Into Your Investment Strategy
For Australian investors, commingled funds offer a unique set of advantages:
- Diversification: By pooling assets, investors gain access to a broader spread of asset classes—think direct property, infrastructure, private equity, and global bonds—that would otherwise be difficult to access individually.
- Cost Efficiency: Large-scale investing means lower per-unit costs and stronger negotiating power on management fees. In 2025, many super funds are reducing member costs by increasing their allocations to commingled vehicles.
- Professional Management: These funds are typically managed by experienced institutional managers, bringing advanced research, risk controls, and deal access to the table.
Real-World Example: Hostplus, one of Australia’s largest industry super funds, has expanded its use of commingled funds for infrastructure and private capital, allowing everyday members to benefit from assets like toll roads and data centres—investments that would be out of reach for individuals.
Considerations: Commingled funds are not without drawbacks. They often have higher minimum investment thresholds, longer lock-up periods, and less liquidity than exchange-traded options. However, for investors able to meet these requirements, the trade-offs can be worthwhile—especially with the added transparency and ESG focus in 2025.
The Bottom Line: Is a Commingled Fund Right for You?
As the Australian investment landscape evolves, commingled funds are becoming a crucial tool for accessing institutional-grade strategies with improved transparency and lower costs. Whether you’re managing a super fund or seeking to diversify your own wealth, now is the time to consider how commingled funds could fit into your financial plan.
