What are the different fund types?

A single-sector fund is invested in one asset class. It could be Australian shares, property or fixed income. They may also be invested in companies in specific sector (like tech shares) or in a particular region (like Asia). 

These funds are managed by investment managers who specialise in the sector the fund is invested in. 

The risk level of the single-sector fund will vary based on the companies contained and the region. For example, more established markets will generally have less risk than an emerging market economy. 

CFS offers several single-sector funds including Australian and emerging market shares, Australian small companies, property, fixed income and alternatives. 

A multi-sector, or multi-asset fund, may combine investments in multiple asset classes. For example, it could contain Australian shares and Australian property. 

Like a single-sector fund, a multi-sector fund is professionally managed by specialist investment managers. 

The risk level for a multi-sector fund will depend on what is in the fund. A growth fund will generally contain higher-risk investments like property or shares, whereas a conservative fund might have lower-risk investments like cash and fixed income. Managers of a multi-sector fund can change the structure of the fund to help protect against volatility. 

CFS offers a range of multi-sector options to suit different risk profiles. 

A multi-manager fund, or a 'fund of funds', is a single fund that mixes the investments from multiple investment managers. This is done to spread out the risk of relying on the investment strategy of a single fund manager. It also gives an investor access to a diverse mix of investment types without needing to invest in each individually, reducing the cost of entry and diversifying an investment portfolio.

For example, a global shares fund may have three investment managers. 20% comes from Manager A, 30% from Manager B, and 50% from Manager C. Each investment portfolio is managed by the respective investment manager.

CFS offers several multi-manager options to choose from. 

Like the name implies, a single-manager fund is one professional investment manager handling an option. It can be either a single-sector or multi-sector fund. The option is managed according to the investment objectives set up by CFS. 

By offering a range of single-manager funds, we are able to diversify our investment offerings. 

Most funds can be classified as either 'active' or 'passive' in their approach to investing.

In active funds, the investment manager makes strategic decisions about how the option is structured in order to outperform the market. 

In passive (or 'index') funds, there is little decision-making involved. Instead, the manager chooses a benchmark, like the ASX 200 index for Australian shares, and aims to replicate or follow the returns of that benchmark.

CFS offers a range of funds that use both active and passive strategies – in some cases a combination of both. They can be single-sector or multi-sector.

The risk level of the option depends on the management style and decisions as well as the ways the option is invested.