Managed funds fees?

[Ato]

When investing in funds, what are appropriate fees as a percentage? Is the average, in total, something like 5%, more, less? What is a good %, bad %?

 

[Beej]

When investing in funds, what are appropriate fees as a percentage? Is the average, in total, something like 5%, more, less? What is a good %, bad %?

< 1% is great, > 2% is expensive. Watch out for additional performance fees where they might take a percentage of any profits over a certain threshold.

Most wholesale funds would charge around a 1% annual management fee for an actively managed fund like a balanced or managed growth type fund (investing in a mix of shares, property, fixed interest etc). Retail funds seem to charge more, industry funds (if you are looking for superannuation purposes) are the cheapest and probably best value.

A a better alternative to managed funds IMO, you might want to investigate a product called a Separately Managed Account (SMA), which is offerred by many providers nowadays. SMAs are like a managed fund, cost about the same, but have many advantages from the taxation point of view, greater flexibility and transparency, and you actually own all the underlying assets directly; ie you own the shares - not units in a trust.

Cheers,

Beej

 

[Krusty the Klown]

1% or below is good.

Anything above 2.5% is expensive and you could find it cheaper.

Actively managed funds are more expense to run than a passively managed fund (like an index fund) so fees are higher.

International equity funds are on average the most expensive, followed by domestic actively managed equities, then property funds and balanced funds and index funds, followed by fixed interest and mortgage income funds.

5% is a joke.

Having said that if you can find a manager that will outperform his or her peers by 5% is that worth paying an extra 1%?

Probably better to compare performance along with cost.

 

[Ato]

Goodo. I got info on a new fund made 31 July this year, with 5.5% fees total. I'm beginning to think it's a scam.

 

[Krusty the Klown]

5.5%????????

What is it called? Do you have a link?

I'd like to have a look.

 

[Ato]

Sent you PM, as I dont know if I'm allowed to post it here.

 

[Boggo]

Just buy the funds via your broker on the ASX, there are quite few of these now.

The S&P ASX 200 fund (STW) is worth a look, low fees and you can get out or top up as you see fit.
Middleman fees and charges etc take the value out of most funds in a flat market.

http://www.spdrs.com.au/etf/fund/fund_detail_STW.html

Just my

 

[Bushman]

Sent you PM, as I dont know if I'm allowed to post it here.

Can you please PM me the name too? Be interested to have a look.

 

[Garpal Gumnut]

You are a mug to invest in Managed funds.

They are mostly set up by institutions as a means of skimming fees off investors without risk to themselves.

They go long and short to protect the parent entity., as they have multiple funds churning stocks back and forth, and their main interest is not you.

Stay away mate.

gg

 

[Ato]

Hehe goodo, thanks. I truly am a mug though