Managed Funds Australia 2025: Rules, Trends & Investor Guide

Managed funds have long been a staple for Australians seeking to diversify their investments, tap into professional expertise, and gain access to a broad range of asset classes. But with fresh regulatory changes and evolving market dynamics in 2025, understanding how managed funds work—and how to choose the right one—has never been more important.

What Are Managed Funds and How Do They Work?

At their core, managed funds pool money from multiple investors, with a professional fund manager buying and selling assets on your behalf. This gives everyday Australians access to investments that might otherwise be out of reach—think global shares, property trusts, infrastructure projects, and more.

• Accessibility: Start with as little as $1,000 (sometimes less with certain platforms or through regular investment plans).

• Diversification: Spread your risk across dozens or hundreds of assets, smoothing out the bumps of market volatility.

• Professional Management: Benefit from the experience and research of full-time investment professionals.

In 2025, the Australian managed fund sector is valued at over $4 trillion, with new entrants and products catering to a spectrum of risk profiles, ethical preferences, and investment horizons.

2025 Regulatory Updates: What’s Changed?

This year has seen several regulatory tweaks aimed at boosting transparency and protecting investors:

• Fee Disclosure: ASIC’s updated requirements now mandate clearer breakdowns of management and performance fees, making it easier for investors to compare true costs across funds.

• Sustainable Investing Labels: New labelling standards require funds marketing as “ESG” or “green” to meet stricter criteria, helping investors avoid ‘greenwashing’ traps.

• Liquidity Management: Fund managers must now maintain enhanced liquidity buffers and provide regular updates on underlying asset liquidity—especially important for funds holding property or unlisted assets.

These changes mean investors in 2025 can make more informed choices and better understand what they’re paying for.

Types of Managed Funds: Which One Fits Your Goals?

The managed fund landscape in Australia is diverse. Here’s a quick guide to the main types you’ll encounter:

• Active Funds: Fund managers make regular buy/sell decisions aiming to outperform the market. These typically charge higher fees but offer the potential for above-average returns.

• Index Funds: Also known as passive funds, these track a specific market index (like the ASX 200) and often have lower fees.

• Sector Funds: Focused on a particular sector (e.g., technology, healthcare) or theme (e.g., climate transition), these can offer higher growth but come with more risk.

• Multi-Asset Funds: Blend shares, bonds, property, and cash for a balanced approach—popular with retirement savers and those seeking steady growth.

New in 2025, several funds now incorporate dynamic asset allocation, shifting between sectors and asset classes based on market signals, aiming to cushion against volatility.

How to Choose a Managed Fund in 2025

Picking the right managed fund is about matching your risk appetite, investment timeline, and ethical preferences. Here are key factors to consider:

• Performance (Net of Fees): Look beyond headline returns and focus on net performance after all fees and costs.

• Management Team: Research the track record and stability of the fund manager—longevity and consistency matter.

• Fee Structure: Scrutinise both ongoing management fees and any performance or entry/exit fees. Even small differences can add up over time.

• Liquidity: Check how quickly you can access your money. Some funds, especially those with property or private equity, may have withdrawal restrictions.

• Transparency: Ensure regular, detailed reporting and access to up-to-date holdings and strategy explanations.

Don’t overlook the Product Disclosure Statement (PDS) for each fund—it’s your blueprint for understanding what you’re investing in.

Real-World Example: Managed Fund Performance in 2025

Let’s consider a popular Australian balanced fund in 2025. Over the past year, it delivered a net return of 7.2%, slightly above the ASX All Ordinaries’ 6.8%, despite global headwinds and inflationary pressures. Its management fee sits at 0.85% per annum, and recent regulatory changes mean its quarterly reports now clearly show all fee components, asset breakdowns, and ESG screening methodology.

Meanwhile, index funds have continued to attract inflows, with some charging as little as 0.19% per annum—a compelling option for cost-conscious investors.

The Future: Trends to Watch

• ESG and Impact Investing: Strong demand continues for sustainable and ethical funds, with tighter labelling standards expected to drive further innovation.

• Digital Platforms: Direct-to-consumer platforms and mobile apps are making managed funds more accessible, with streamlined onboarding and micro-investment options.

• Personalisation: Data-driven tools are enabling tailored portfolios within managed fund structures—think goal-based investing, risk profiling, and automated rebalancing.

As the sector evolves, Australian investors can expect more choice, transparency, and technology-driven convenience.