A managed investment scheme (MIS) is a financial product where a professional fund manager invests your money on your behalf. These schemes pool together funds from multiple investors to invest in various assets, such as shares, bonds, property, or a combination of these. The primary goal is to generate returns for investors over time.

How MIS Works?

• Investment Choice: Investors choose an MIS that aligns with their investment objectives and risk tolerance.
• Fund Manager: The fund manager, a professional with expertise in investing, makes decisions about where to invest the pooled funds.
• Diversification: A Managed Investment Scheme offers diversification, spreading risk across various investments. This can help mitigate losses if one investment performs poorly.
• Fees: Investors typically pay fees to cover the fund manager’s services and the operational costs of the scheme.

Types of Managed Investment Schemes

Managed investment schemes (MIS) offer a diverse range of investment options, catering to different risk tolerances and financial goals. Here are some common types:

• Shares: These schemes invest primarily in shares of publicly listed companies.
• Bonds: These schemes invest in debt securities issued by governments, corporations, and other entities.
• Property: These schemes invest in real estate, such as commercial or residential properties.
• Mixed: These schemes invest in a combination of shares, bonds, and property.

Kiwisaver and Managed Investment Schemes 

Kiwisaver, New Zealand’s national retirement savings scheme, is a type of managed investment scheme. It offers a variety of retirement investment options, including:

• Growth: This option invests in shares and other growth assets, aiming for higher returns over the long term.
• Conservative: This option invests in a mix of shares and bonds, seeking a balance between growth and stability.
• Balanced: This option invests in a mix of shares, bonds, and property, offering a moderate level of risk and return.
• Default: This option is automatically assigned to new Kiwisaver members and invests in a mix of growth and conservative funds.

There are numerous different Kiwisaver providers including for instance the simplicity kiwisaver scheme, Pie Funds,  and the Nikko Goalsgetter Kiwisaver scheme. 

Benefits of Investing in MIS

• Professional Management: Fund managers have the expertise and resources to make informed investment decisions.
• Diversification: MIS helps spread risk across various investments.
• Accessibility: MIS can be a convenient way to invest, even with small amounts of money.
• Potential for Growth: Over the long term, MIS can offer significant returns.

Considerations When Choosing an MIS

• Investment Objectives: Consider your financial goals and risk tolerance.
• Fees: Compare the fees charged by different MIS.
• Performance: Look at the historical performance of the MIS.
• Fund Manager: Research the experience and track record of the fund manager.

Managed investment schemes can be a valuable tool for building wealth and achieving financial goals. By understanding the different types of MIS, their benefits, and the factors to consider when choosing one, you can make informed decisions about your investments. Kiwisaver, as a managed investment scheme, offers a variety of options to suit different investment needs and risk tolerances.