In an age of ETFs, robo-advice, and market volatility, the fund manager’s role is more vital — and more scrutinised — than ever. But what does a fund manager actually do? And how are new regulations and technologies shaping the way Australians invest through managed funds in 2025?
The Core Role: More Than Picking Stocks
At its heart, a fund manager is responsible for investing other people’s money — whether that’s superannuation savings, retail managed funds, or institutional capital. Their mission is to deliver returns that beat a benchmark, while managing risk. But the job goes far beyond simply selecting shares or bonds.
- Research & Analysis: Fund managers and their teams dive deep into company financials, global trends, and macroeconomic data to identify opportunities and threats.
- Portfolio Construction: They decide how to allocate assets, balancing growth and defensive positions to suit the fund’s objectives.
- Risk Management: Using sophisticated tools, they monitor market, credit, and liquidity risks — especially crucial in today’s uncertain economic climate.
- Client Reporting & Compliance: Modern fund managers must keep investors informed, comply with ASIC rules, and respond swiftly to regulatory changes.
For example, an Australian equity fund manager might tilt their portfolio toward sectors benefiting from government infrastructure spending, while hedging currency exposure to protect against a falling Australian dollar.
2025: New Rules, New Tools
Australian fund management in 2025 looks different from even a few years ago, driven by both policy shifts and technological innovation:
- Performance Fee Reforms: In January 2025, ASIC introduced stricter guidelines on how performance fees are calculated and disclosed, aiming for greater transparency. This means investors can more easily compare funds and avoid hidden costs.
- Sustainability Mandates: The Federal Government’s new Sustainable Finance Framework, effective July 2025, requires managed funds to disclose their environmental, social, and governance (ESG) strategies. Fund managers must now prove — not just claim — that their portfolios are aligned with net-zero and social responsibility targets.
- AI-Driven Analytics: More funds are using artificial intelligence for real-time market analysis and risk assessment. While humans still make the final calls, AI helps flag anomalies or opportunities much faster than traditional models.
Consider the example of a super fund in 2025: its manager might use AI to rebalance portfolios based on members’ changing risk profiles, while also reporting on the carbon footprint of holdings in line with new rules.
Choosing the Right Fund Manager: What to Look For in 2025
With over 13,000 managed investment schemes in Australia and a growing field of fund managers, how do investors know who to trust with their money?
- Track Record: Past performance isn’t everything, but consistent outperformance (after fees) can signal a manager’s skill.
- Fee Structure: With 2025’s fee disclosure reforms, scrutinise both management and performance fees — and check for high ‘indirect costs’ that can eat into returns.
- Investment Philosophy: Does the manager stick to a clear, evidence-based process? Are they transparent about how decisions are made and risks managed?
- ESG Integration: If sustainability matters to you, look for independent verification of the fund’s ESG claims under the new regulations.
- Communication: In a volatile market, timely updates and clear reporting are essential. The best fund managers in 2025 use digital dashboards, not just quarterly PDFs.
Major players like Magellan, AustralianSuper, and emerging boutique managers are increasingly differentiating themselves through technology and transparency — not just returns.
The Bottom Line: Fund Managers Are Evolving — So Should Investors
Fund managers remain central to Australia’s investment landscape, but the rules of the game are changing. New regulations, ESG mandates, and digital tools mean investors have more power — and more responsibility — than ever. By understanding what fund managers do and how the landscape is shifting in 2025, Australians can make smarter, more confident choices about where to put their money.
