What is the difference between wholesale and retail management funds?

• Retail managed funds

Typically available for all investors, a broader marketplace, with relatively low minimum investment amount.

Common types of retail funds include Managed Investment Schemes and exchange-traded funds (ETFs).

• Wholesale managed funds

Designed to cater for professional investors, often involve higher minimum investment amounts, often with a higher risk/return profiles than retail products.

KEY TAKEAWAYS

• Different type of investors

Retail funds are intended for retail investors who are ordinary investors, while wholesale funds are intended to wholesale investors or institutional investors.

• Different minimum balances

Retail funds are easier to access with its low minimum balances, while wholesale funds have hefty minimums.

• ASIC registered or not

Wholesale funds are not required to be registered, while retail funds are required to be registered.

• Different fee structure

The fees charged by a wholesale fund are usually lower then a retail fund. Generally, it is easier and cheaper to structure and promote a fund as an unregistered fund compared to a registered fund.

Tanggram Investment Fund, for instance, is a registered retail fund. It has a far more onerous undertaking with a multitude of compliance, governance, audit and reporting requirements which are not required for an unregistered wholesale fund. For more information please refer to the Tanggram website.

Disclaimer: All contents presented in this blog have been prepared for informational purposes only, and are not intended to provide, and should not be relied on for any personal investment, tax, or accounting advice. You should, before making any decision regarding any information, strategies or product mentioned on this blog, consult your own financial or accounting advisers to consider whether the product is appropriate for you, based on your own objectives, financial situations and needs.