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FINANCE

Understanding Managed Funds: Types, Fees, and Performance Drivers

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Managed Funds

Thinking about putting your money into a managed fund?

You aren’t the only one feeling this way. In 2025, Australian managed funds experienced $35.9 billion of net inflows as investors searched for alternatives to grow wealth without having to directly pick stocks.

But here’s the catch…

Many managed funds are terrible investments. Some have fees that slowly devour your returns. Others consistently underperform the market. And many investors buy them without understanding what they own.

This tutorial simplifies the fundamentals to help you make informed financial decisions.

Here’s what’s inside:

  • What Are Managed Funds (Explained Simply)
  • The Main Types Of Managed Funds
  • Managed Fund Fees: What You Are Really Paying
  • The Real Drivers Of Fund Performance

What Are Managed Funds (Explained Simply)

Managed funds pool your money with that of other investors. The fund manager invests it in a variety of assets such as shares, property or bonds.

You don’t pick the investments yourself. The fund manager does that for you.

You pay fees for their service. You receive “units” in the fund for your money. The units represent your portion of the pool. As the pool increases in value, so do your units.

Well… if you are still asking yourself what are managed funds doing for you… They allow everyday Australians access to professional money managers and asset diversification that would be hard to create yourself.

Pretty straightforward, right?

The Main Types Of Managed Funds

There are literally dozens of different types of managed funds available. Most fit into several broad categories, however. Understanding the differences allow you to choose wisely.

Equity Funds

Equity funds primarily invest in shares. Equity funds provide you with long-term capital growth through investment in the share market.

They can be:

  • Australian equity funds that buy ASX-listed shares
  • International equity funds that invest globally
  • Sector-specific funds focused on areas like tech, mining, or healthcare

Equity funds are generally riskier. However, they can offer the greatest long-term rewards.

Fixed Income Funds

Fixed income funds invest in bonds, government debt and other interest-paying assets.

Bond or fixed income funds are the less volatile siblings of equity funds. They won’t make you rich, but they won’t lose you a lot of money either. Bonds were Australian investors favorite investment in 2025, receiving over $17 billion in net inflows throughout the year.

Multi-Asset & Balanced Funds

Do you want a bit of everything? Multi-asset or balanced funds invest in shares, bonds, cash and sometimes property all together in one fund.

The fund manager makes the decision as per the fund strategy. This is a widely used “set it and forget it” choice for investors who don’t want to pick their own asset allocation.

Property And Alternative Funds

Property funds invest in commercial real estate, residential developments or property trusts.

Alternative funds go further. They might invest in:

  • Private equity
  • Infrastructure projects
  • Commodities
  • Hedge fund strategies

Many of these funds come with higher minimum investments. However they can provide share market uncorrelated returns.

Managed Fund Fees: What You Are Really Paying

Here’s where things get interesting…

Fees are retirement account killers. Australian managed fund members pay an average total expense ratio of around 1.5% per year. That doesn’t sound like a lot. But over the course of 30 years, fees can eat up a significant portion of your ending balance.

Let’s break down what you are actually paying for.

Management Fees & Costs

This is the primary fee assessed by the fund manager. Fund management fees typically range from 0.5% to 2.5% annually and are automatically deducted from your account balance.

You will not see this fee withdrawn from your bank account. It is simply deducted from the value of your units.

Performance Fees

Some funds charge an extra fee if they beat their benchmark.

They are typically around 10% to 20% of the outperformance. So if your fund is up 5% more than the market, you might give 1% of that profit to the manager.

The theory is simple. Managers should be rewarded for good performance. Practice: most funds levy performance fees despite spotty long-term records.

Buy/Sell Spreads

Whenever you purchase or redeem units in a fund, the buy price and sell price will always differ slightly. This spread covers transaction costs incurred by the fund.

It’s typically minuscule. However it compounds if you are frequently trading around funds.

Note: Generally speaking, active funds cost significantly more than passive ones. Australian Large Cap ETFs on average have an annual fee of 0.38%, versus 1.11% for similar active funds.

The Real Drivers Of Fund Performance

Ok, so what does make one managed fund better than another? Only a couple things.

Asset Allocation

Asset allocation (mix of shares, bonds, etc) is most important for long-term returns.

Research indicates that the returns of a fund are mostly determined by its asset allocation. Over time, the securities selected within each asset class contribute relatively little to the overall performance. Equity-heavy funds are more volatile than those dominated by bonds.

Fund Manager Skill

You can definitely get managers who create value. It’s more difficult than most people realize though.

The harsh reality is that the majority of actively managed funds underperform their passive index counterparts in Australia over 10 and 15 years. They exist. Skillful managers. They’re just few and far between.

Fees

We discussed this earlier, but let’s drive this point home. Lower fees translate to higher net returns over time, virtually every time.

1% fees don’t sound like a lot. But when it’s compounded over 30 years on a $100,000 investment that can mean $20,000 or more not in your pocket because of fees.

Market Conditions

You can’t time the markets. And the economy, interest rates and international events can all impact fund performance.

The best fund manager cannot avoid losing money during a severe market correction. The key is staying invested in quality during the good times and bad.

The Bottom Line

Managed funds allow everyday investors access to professional money management without having to earn an MBA.

However, you still have to do your due diligence. Before investing in any fund be sure to:

  • Understand what assets the fund actually invests in
  • Check the total fees you’ll be paying each year
  • Look at the long-term performance against the benchmark
  • Match the fund’s risk level to your own goals

The correct managed fund will grow your wealth exponentially over time. The incorrect one will slowly leach your savings without you even realizing it.

Take the time to compare your options. Your future self will thank you.

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FINANCE

What Investors Should Check Before Applying for a Fix and Flip Loan

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Fix and Flip Loan

For real estate investors, a fix and flip loan can offer a financing path built around a property’s renovation timeline rather than a borrower’s long-term ability to repay over thirty years. Before applying, it helps to understand the fix and flip loan requirements that may apply to the property, the borrower, and the proposed loan structure.

Ridge Street Capital is a direct lender whose fix and flip program covers purchase and rehab financing, loan sizing tied to both cost and after-repair value, and closings in as little as 7 to 14 days. That focus makes it a relevant starting point for investors researching renovation financing.

However, the final guidelines, pricing, and approval conditions always depend on the specific lender and transaction.

Why Fix and Flip Loans Look Different

A conventional mortgage is built around a borrower’s income and a 30-year repayment schedule. A fix and flip loan is built around a project. It’s short-term, typically 6-12 months, interest-only, and repaid in full when the property sells or gets refinanced.

That structure exists because the lender is financing a renovation and resale, not a long-term hold, and the underwriting reflects that difference.

Still, fix and flip financing involves real underwriting. Lenders review the purchase price, the rehab budget, the property’s projected after-repair value, and the borrower’s credit and experience. They also decide how much of that value actually counts toward the loan, so a rehab budget an investor submits is not automatically the number a lender approves.

Start With the Numbers

Lenders typically size a fix and flip loan two ways, using whichever produces the smaller loan.

  1. The first is a percentage of the total project cost, the purchase price plus the rehab budget, known as loan-to-cost.
  2. The second is a percentage of the property’s projected value after the renovation is complete, known as loan-to-ARV.

For example, on a property purchased for $180,000 with a $60,000 rehab budget, the total project cost comes to $240,000. At 90% loan-to-cost, that produces a loan of $216,000.

If the after-repair value comes in at $260,000 and the lender caps financing at 75% of that figure, the loan-to-ARV calculation instead produces $195,000.

Since $195,000 is the smaller number, that becomes the loan amount, leaving the investor to cover the remaining $45,000 in project costs out of pocket.

The important variable is the after-repair value itself. A lender typically wants that number backed by recent sold comparable, not a seller’s optimistic estimate or a handful of active listings that haven’t closed yet. A closer look at how fix and flip loans are structured shows why lenders treat that ARV figure as conservatively as they do: it’s the ceiling the entire loan is measured against.

Review the Property Before the Deal

A strong borrower profile can’t fully offset a weak property. Review these factors before making an offer:

  • Property type, including single-family homes, condos, and small multifamily buildings.
  • Scope of rehab needed, and whether it’s cosmetic or structural.
  • Local resale timelines and how long comparable renovated homes typically sit before selling.
  • Neighborhood trend, since a declining submarket often reduces how much a lender will finance against ARV.
  • Permit and zoning requirements tied to the planned renovation.
  • Property condition issues that could surface during appraisal or inspection.

A rehab budget that looks reasonable on paper can still fall short if permitting delays or an undisclosed structural issue push the project past its planned timeline.

Build a Practical Document Checklist

Organized documentation tends to move underwriting along faster. Gather the following before applying:

  1. Purchase contract for the property.
  2. A detailed rehab budget, ideally broken down by line item.
  3. Proof of funds or bank statements showing cash for closing and reserves.
  4. Government-issued identification.
  5. Entity documents, if the property will close under an LLC or similar structure.
  6. Recent credit report or authorization to pull one.
  7. A contractor bid or scope of work, when available.

Check Credit, Cash, and Reserves

Fix and flip loans qualify primarily on the deal, but borrower-level strength still matters. Ask about the minimum credit score, how much cash is required at closing, and whether reserves are expected beyond that. Most programs also weigh an investor’s track record, since a first rehab and a fifth rehab don’t carry the same underwriting risk, and some lenders scale the available leverage to match experience.

Keep a clean paper trail for any funds moving into the deal. Unexplained deposits or transfers close to an application can trigger follow-up requests that slow the file down.

Compare Loan Terms, Not Just Interest Rates

A lower rate doesn’t automatically mean a better loan for a rehab project. Compare the entire structure, including:

  • Interest rate, points, and origination fee.
  • Maximum loan-to-cost and loan-to-ARV percentages.
  • Loan term and what happens if the project runs past it.
  • Whether rehab funds are disbursed upfront or released in draws as work completes.
  • Minimum and maximum loan size, since a program built for larger deals may not serve a smaller rehab well.
  • Expected timeline from application to closing.

Use Conservative Renovation Assumptions

Stress-test the project before committing to it. Run the numbers with a rehab budget that runs over by ten to twenty percent, a longer holding period than planned, and a resale price a bit below the current comparable sales.

A project that only works at the best-case numbers leaves little room for a cost overrun, a slow contractor, or a softening local market.

A rehab that looks profitable at the original budget and timeline can turn thin quickly once an extra month of holding costs and a round of unexpected repairs eat into it.

Questions to Ask Before Applying

  1. What percentage of the purchase price and rehab budget does the loan actually cover?
  2. How is the after-repair value determined, and what comparable support it?
  3. What credit score and reserve requirements apply?
  4. If rehab funds are released in draws, what triggers each one, an inspection, a receipt, or something else?
  5. What happens if the project isn’t finished or sold by the end of the loan term?
  6. Is there a minimum number of completed projects required for full leverage?
  7. What fees are due at closing, and how long does the process typically take from application to funding?

Conclusion

A well-prepared fix and flip loan application connects a realistic purchase price, an honest rehab budget, a defensible after-repair value, and a borrower’s own cash and credit position. Start with conservative numbers, confirm how the lender calculates loan-to-cost and loan-to-ARV, and compare more than one program before committing to a project. That groundwork tends to matter more than the advertised rate once the renovation actually gets underway.

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FINANCE

Choosing the Right CPA Firm in New York

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CPA Firm in New York

Selecting a CPA firm in New York is a decision that affects more than annual tax filings; it influences business strategy, cash flow management, and long-term financial health. Whether you are a small business owner, a freelancer, or an individual with complex finances, choosing a firm that understands New York’s regulatory environment and local business culture is essential. This article explains how to evaluate firms beyond façade and marketing, ensuring you partner with professionals who bring both technical skill and practical guidance.

Why the Right CPA Matters

A CPA firm serves as a financial advisor, auditor, tax strategist, and sometimes as a confident sounding board. The right firm can reduce tax liabilities, improve reporting accuracy, and help you plan for growth or retirement. In New York, state and city tax codes, payroll requirements, and industry-specific regulations add layers of complexity. A firm that has experience navigating those nuances will save you time and money while preventing penalties and compliance issues. Look for firms that demonstrate a clear understanding of your industry and the specific local rules that affect your finances.

Services to Evaluate

Not all CPA firms offer the same portfolio of services. Some focus primarily on tax preparation, while others provide comprehensive financial planning, bookkeeping, payroll management, and audit representation. Start by identifying which services you need now and which you might require in the future. If you anticipate growth, consider firms that offer scalable solutions such as cloud-based bookkeeping, advisory services that support capital raising, or transaction support for mergers and acquisitions. Firms that invest in technology can deliver faster reporting and better insights, but technical proficiency should never replace strong accounting fundamentals.

Credentials and Specializations

Licensing and professional credentials matter. Confirm that the firm’s partners and senior staff are licensed CPAs and that the firm has a solid track record with professional associations. Beyond the CPA license, look for specializations relevant to your situation: nonprofit accounting, real estate tax, international taxation, or estate planning, for example. These specialties indicate deeper experience with the specific rules and best practices that apply to your case.

Assessing Reputation and Client Fit

Reputation is best assessed through a mix of references, client testimonials, and direct conversations. Ask prospective firms for references from clients who match your size and industry. Pay attention to how they describe the firm’s responsiveness, clarity in communication, and ability to translate complex issues into actionable advice. Culture fit also matters: a firm that is collaborative and proactive will integrate better with your team than one that is purely transactional. During initial meetings, evaluate how well the firm listens and whether they propose solutions that reflect your priorities rather than template-driven answers.

Technology and Reporting

Modern accounting relies on technology for accuracy, timeliness, and transparency. Ask about the firm’s preferred software platforms and how they handle secure document exchange, remote collaboration, and real-time reporting. Cloud-based solutions can provide you with up-to-date financial dashboards and streamlined workflows, but be sure the firm follows best practices for data security and backup. Firms that can present clear, timely reports enable you to make strategic decisions faster and with more confidence.

Pricing Structure and Value

Understanding pricing models is critical. Firms may charge hourly rates, flat fees for specific services, or offer retainer arrangements. Hourly billing can be unpredictable, while fixed fees provide clarity but may limit flexibility. When evaluating price, focus on value rather than the lowest cost. A higher-fee firm that prevents costly mistakes, uncovers tax savings, or optimizes operations can deliver a superior return on investment. Discuss how billing is handled for unexpected work and get a clear engagement letter that outlines scope, timelines, and deliverables.

Communication and Accessibility

Access to your CPA team during critical periods—quarterly closings, tax season, or an audit—determines how effectively issues are resolved. Ask about typical response times and who will be your primary point of contact. Ensure the firm has a structured onboarding process so that your historical records, payroll, and tax documents are migrated cleanly and securely. Effective communication also includes regular meetings and proactive advice. A firm that waits until crises arise is less valuable than one that anticipates challenges and provides ongoing guidance.

Ethical Standards and Independence

Integrity and ethical standards are non-negotiable. Confirm that the firm adheres to professional ethics and can demonstrate independence where required, particularly for audit and assurance services. In New York’s dense marketplace, conflicts of interest can arise; a reputable firm will disclose potential conflicts and explain how they would be managed. Ask about their approach to quality control and how they stay current with changes in tax law and accounting standards.

Making the Final Decision

After narrowing candidates, arrange follow-up meetings to discuss specific scenarios relevant to your finances. Request a trial period or start with a limited engagement, such as tax preparation or a quarterly review, to assess working chemistry. During this pilot phase, evaluate timeliness, clarity of advice, and the practical impact of their recommendations. Your goal is to forge a sustainable relationship with a partner who not only meets compliance needs but also contributes to your financial strategy. Choosing a CPA firm in New York requires careful consideration of expertise, services, technology, and cultural fit. Take time to vet candidates thoroughly and prioritize firms that combine technical skill with proactive, client-focused service. When you find a firm that aligns with your goals and communicates clearly, you gain a long-term partner who helps navigate complexity and supports growth. For business owners and individuals seeking reliable guidance in the city’s fast-paced environment, a targeted search that emphasizes experience, transparency, and responsiveness will lead you to the right choice, whether you require complex tax planning or day-to-day accounting support. For a shorter list of qualified professionals, consult local professional networks or a directory of trusted New York accountants to begin conversations with firms that understand the region’s unique financial landscape.

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FINANCE

The Financial Advantages of Planning Taxes Throughout the Year

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Planning Taxes

Taxes have a way of staying in the background until a filing deadline suddenly appears on the calendar. At that point, many people begin searching for receipts, reviewing expenses, and hoping nothing important has been overlooked. That approach may get the paperwork submitted on time, but it often leaves valuable opportunities behind. Advise RE understands that meaningful tax planning is about much more than preparing a return once a year. Looking at income, expenses, investments, and financial goals throughout every season allows individuals and business owners to make thoughtful decisions before they become urgent. Instead of feeling rushed when tax season arrives, many discover that regular planning creates greater confidence and a stronger financial foundation.

Tax Planning Is More Than Filing Paperwork

One of the biggest misconceptions surrounding taxes is that preparation and planning are the same thing. While they certainly work together, they serve different purposes. Tax preparation focuses on reporting financial information that has already happened. Tax planning, on the other hand, helps shape decisions before the year is over.

Imagine making a major investment in December only to discover a few months later that a different approach could have produced a better tax outcome. Situations like this happen more often than people realize because financial choices rarely exist in isolation. Business purchases, retirement contributions, investment strategies, charitable giving, and property transactions all have tax consequences that deserve attention before deadlines arrive.

By viewing taxes as an ongoing part of financial management instead of a yearly event, it becomes much easier to recognize opportunities while they are still available.

Better Decisions Come From Better Timing

Timing often plays a larger role in tax planning than many people expect. Waiting until documents are gathered for filing usually means every financial decision has already been made, leaving little room for adjustments.

Throughout the year, circumstances naturally change. A business may experience higher profits than expected. A family could purchase a new home. Someone might begin investing, sell property, receive an inheritance, or start consulting work on the side. Every one of these situations can influence tax responsibilities in different ways.

Regular planning creates opportunities to respond while options still exist. Instead of discovering missed deductions after the fact, individuals have the chance to structure financial decisions more effectively. Even small adjustments made over several months can create meaningful improvements by the end of the year.

Reducing Stress Before Tax Season Arrives

Few people genuinely enjoy scrambling to organize financial records during tax season. Missing paperwork, unanswered questions, and uncertainty about deductions can quickly turn what should be a straightforward process into an exhausting experience.

Year round tax planning changes that feeling entirely.

Rather than gathering months of information all at once, financial records remain organized as the year progresses. Income can be monitored consistently, expenses categorized properly, and supporting documents stored where they belong. This ongoing attention makes tax preparation significantly smoother because much of the work has already been completed gradually.

Instead of wondering whether important information has been forgotten, taxpayers approach filing season with greater clarity and confidence.

Creating Opportunities Instead of Looking Back

One of the most rewarding aspects of proactive tax planning is the ability to make decisions before opportunities disappear.

Many tax saving strategies depend on actions taken before the end of the calendar year. Retirement contributions, business equipment purchases, estimated tax payments, charitable donations, and investment decisions often provide benefits only when completed within specific timeframes.

Once those deadlines pass, many choices simply cannot be reversed.

That reality highlights why waiting until tax preparation begins can become expensive. The paperwork may accurately reflect the previous year, but it cannot create opportunities that no longer exist.

Planning throughout the year allows financial strategies to evolve naturally alongside changing goals, creating flexibility instead of limitations.

Supporting Business Growth With Smarter Planning

Business owners often juggle dozens of responsibilities every week. Managing employees, serving customers, marketing services, monitoring expenses, and planning future growth all compete for attention. Taxes sometimes become another task postponed until filing season.

Unfortunately, delayed planning may affect more than taxes alone.

Cash flow projections, equipment purchases, payroll decisions, hiring plans, and business expansion frequently carry tax implications. Reviewing these areas throughout the year helps owners understand how operational decisions connect with financial outcomes.

That broader perspective allows businesses to make investments with greater confidence while avoiding unnecessary surprises later. Instead of reacting to tax obligations after decisions have already been made, planning becomes part of the overall business strategy.

Building Long Term Financial Confidence

Taxes influence far more than annual returns. They affect retirement planning, investment growth, real estate decisions, business ownership, and wealth accumulation over many years.

Consistent planning helps connect today’s financial decisions with tomorrow’s goals.

For example, increasing retirement contributions may reduce taxable income while strengthening future financial security. Strategic investment decisions may improve overall portfolio performance while considering tax efficiency. Business owners may discover opportunities to restructure operations in ways that better support both profitability and compliance.

None of these outcomes happen overnight. They develop gradually through thoughtful reviews and ongoing adjustments that keep financial plans aligned with changing circumstances.

That steady progress often creates far greater confidence than making rushed decisions under filing deadlines.

Staying Current With Changing Tax Laws

Tax regulations rarely remain the same for long. New legislation, updated deduction limits, reporting requirements, and policy changes can all influence financial planning from one year to the next.

Trying to understand every change independently can feel overwhelming, especially for individuals balancing careers, businesses, families, and investments.

Regular tax planning provides an opportunity to stay informed as changes occur rather than discovering them months later. Instead of wondering whether new regulations affect personal circumstances, people gain a clearer understanding of how updated rules may influence future decisions.

Remaining informed throughout the year allows financial strategies to adapt naturally instead of requiring major adjustments at the last moment.

A Stronger Financial Future Starts Before Deadlines

Many people view tax season as the finish line, but experienced financial professionals often see it as one milestone within a much larger journey. Every month presents opportunities to improve financial organization, evaluate goals, and make informed decisions that support lasting success.

Year round tax planning transforms taxes from a once a year obligation into an ongoing financial advantage. It encourages thoughtful preparation instead of rushed reactions, creating room for smarter choices, better organization, and greater peace of mind. Whether someone is managing a growing business, investing in real estate, planning for retirement, or simply looking to make more informed financial decisions, consistent guidance throughout the year helps create a future built on preparation rather than pressure. That difference often becomes one of the most valuable investments anyone can make.

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