Having a diverse range of funds at your fingertips lets you choose the right investment options for your circumstances. That said, the wide range of options and their differences can be a lot to take in. Let’s break down the different funds available from Colonial First State (CFS) to help you determine which funds may be right for you. 

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. 

Choosing the right option for you


Finding the right option will depend on your particular needs and circumstances. Here are a few things to consider: 


What is your risk profile?


Your investment choices should align with your financial objectives, your age, years to retirement and the degree of uncertainty you are prepared to accept, such as the possibility of a negative investment return. You can learn more about risk tolerance on the Moneysmart website or by talking to a financial adviser.


What is in the PDS?


The product disclosure statement (PDS) contains valuable information about a fund’s objectives, investments, management fees, and potential risks associated with any investment. 


What are the long-term returns?


Because of fluctuation and volatility in financial markets, past performance is not a guarantee of future performance. Looking at long-term performance of a fund can offer additional insights into the growth potential and structure of a fund.


Who can I talk to?


A financial adviser has the knowledge, skills and experience in helping people understand their investment needs and options at different stages of their life. They can review your investment portfolio and suggest changes to better align with your circumstances – and offer clarity in the sometimes confusing world of investing. Learn more about the benefits of financial advice or find an adviser near you.


You can also call CFS on 13 13 36, Monday to Friday, 8:30am to 6pm (Sydney time).

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Things you should know

Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments. 


Information on this webpage is provided by AIL and CFSIL. It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the target market determinations (TMD) for our financial products at  https://www.cfs.com.au/tmd which include a description of who a financial product might suit. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. You can get the PDS and FSG at www.cfs.com.au or by calling us on 13 13 36.