Which/what type of share fund?

[akumaslair]

Didn't know which forum to put it in, so I put it here

Ok, so we all know about the crappy state of the Aus Sharemarket. (lets not get into this)

now I personally believe now is the time to get back in.

I already have some invested in the Macquarie Small Companies fund,

Im 2.6% down on my investment from like 6 months ago, which is not really bothering me.

nOw, I am thinking of the options that I have, these are the ones for me.(i have a long term goal)

1. Put a high proportion of my $$$ into a 4-6 bluechips and sit back and watch
2. Put a high proportion of my $$$ into 1 managed share fund
2. Put a high proportion of my $$$ into 2-3 managed share fund

Ive been looking into share funds, and amongst the difference companies, there are basically, the ones with all or most in international or local sharefunds.... and a few of them being being entirely of China...

I am just wondering on what I should do now........

should I put some more into the Small Company fund, on the assumption, that small companies are probably not effected as much by the recession as the big compnaies,
I was also looking at the Colonial Geared Share Fund, a
I was also looking at the China fund,

however I don't know idea about where China is going to go from now, ie is OZ more riskier or China????

Dunno whether I should go geared fund or non geared fund...

can someone please give me a few pointers, I have plenty of time to think about it as I dont intend to make a decision right away!!

 

[Joe Blow]

akumaslair,

Nobody on ASF is allowed by law to advise you what to do with your funds. They can give you details of particular funds but cannot tell you how or with whom to invest.

Any posts in this thread that contain anything that even vaguely resembles financial advice will be removed.

 

[akumaslair]

I see fair enough,

are they allowed to say things like:

"I think Australian Based Share funds are better then International because ......"

 

[Timmy]

can someone please give me a few pointers, I have plenty of time to think about it as I dont intend to make a decision right away!!

Good.

Pointer #1: Use the Search function and read the masses of information on this site.

 

[Joe Blow]

I see fair enough,

are they allowed to say things like:

"I think Australian Based Share funds are better then International because ......"

As long as they provide adequate reasoning and do not make specific suggestions as to what you should do with your funds.

General discussion is fine, specific financial advice is not.

 

[Judd]

If you are going down the managed fund route and you are comfortable with that its fine............but, but, you may wish to think about:

• cost of entry as up to 4% can be ripped off for each contribution you make;
  
• what are the internal management costs and the impact on income received. Just remember that under the current law, fund managers can only take their cut out of income not capital gains. That's why you see the income with high franking credits and lots of capital gain (they buggers tend to churn the portfolio.)'
  
• consider that index funds are a darn sight cheaper, don't try to beat the market but match it and over 5 or more years only 50% of fund managers beat the market....but you wont know which is the 50% which beat the market when you invest;
  
• you may wish to consider what is your time frame: 5, 10, 20, 40 years? Jack bogle of Vanguard fame considered that 10 years was short, 40 years medium term and your whole life long-term. Slightly different from the usual "You got to be in the market for 7 years to get a result" which is the mantra from most fund managers;
  
• do you wish your fund manager to be able to short the market, hedge the dollar or just take it as it is;
  
• you may want to research Listed Managed Investment companies which are on the ASX. Some older ones have low internal costs and have being paying dividends to shareholders for 50 years.

As you can see there are many, many variables. Not a bad idea to sit down for a few days (weeks but not months) and think about who you are and what you wish to achieve. But once you have reached a view don't delay; just do it and don't use the rear view mirror otherwise you could go down the "Oh, if only I had done" path. Just accept that fact you have made a decision and it's done and dusted.

 

[akumaslair]

thanks Judd,

You have raised a few interesting points,

I am going to go through a broker/advisor (or whatever they are called that has 0% entry/exit fees) so that area is fine.

Most of the fund managers say 5-7 years is a good time frame,

which I am entirely comfortable with, I am also comfortable and aware with how funds work in general, with their fees/comission etc.

I am at the stage of a dilemma as to focus on a (no names)

* International Share FUnd
* China Share Fund
* Local Share Fund
* Local Geared Share FUnd

For example, if I was comfortable or believed that local shares would out perform China or international, I would go the Geared Local Share fund...

I was wondering of people's opinion of Aust Shares VS CHina Vs International share funds... i know this is opening up a can of worms, I am quite familair and have a good understading of local ones, just the international and CHina ones, I am just not sure about!!

 

[Julia]

I am going to go through a broker/advisor (or whatever they are called that has 0% entry/exit fees) so that area is fine.

So do they have an ongoing trail? In other words, where do they make their money? If you are using a broker who says he is receiving no fees, don't you have to ask how he gets paid?

Have you looked at the MER of the various managed funds you are considering?

Just wondering why you want to pay other people to manage your money?

 

[akumaslair]

actually, I got my terminology wrong, I am not going through an advisor,

I am going through one of those companies that allows you to enter those share funds that waives the 3%-5% entry fee, so thats the last I hear from them, no fees, no contact. I deal with the fund directly after that.

anyways, I am more comfortable letting someone else to do the work.....
I don't really want to be constantly monitoring all the individual shares, and would rather just look at the fund price/performance overall.......

thats just my preference..

 

[ROE]

thanks Judd,

You have raised a few interesting points,

I am going to go through a broker/advisor (or whatever they are called that has 0% entry/exit fees) so that area is fine.

Most of the fund managers say 5-7 years is a good time frame,

which I am entirely comfortable with, I am also comfortable and aware with how funds work in general, with their fees/comission etc.

I am at the stage of a dilemma as to focus on a (no names)

* International Share FUnd
* China Share Fund
* Local Share Fund
* Local Geared Share FUnd

For example, if I was comfortable or believed that local shares would out perform China or international, I would go the Geared Local Share fund...

I was wondering of people's opinion of Aust Shares VS CHina Vs International share funds... i know this is opening up a can of worms, I am quite familair and have a good understading of local ones, just the international and CHina ones, I am just not sure about!!

You wont get something for nothing ... no entry no exit fee sound good but read their fine line. Ask your broker how he's making money?

Management fee? Performance fee? Commission from the Fund? and what percentage

If he said he does it because he make money on some other business
and not giving you a clear percentage and where he made his money
I say walk way because he know he got a sucker like you and will milk you for every cents

It also wise when starting out to invest in your backyard first before venture out in other part of the planet

 

[Bomba]

If you are going through an adviser, then there is a good chance that he/she may be receiving a trail commission which is built into the MER. The adviser does have the discretion to rebate this back to the client. So you may want to ask the adviser if they are receiving a trail on your funds under management.

 

[akumaslair]

ok, I think I will just name it, so people don't need to guess or assume.

Its investsmart formerly direct access.

I used them last time, and are happy with them due to their no entry fees, sure they have a MER but thats ok...

P.S I am not endorsing them or un-endorsing them in anyway

 

[AngusM]

I dont really understand it all either... from what reading I have done, funds typically tend to track the stock market rather than outperform it by much. It does give a good diversification to your portfolio depending on what type of sector your fund is in. I like the idea of being involved with China so I put $20k into Challenger China Share Fund via etrade last Wednesday or so - after having spotted it on the investsmart site. My strategy is to forget about it for say 2 years and see how it goes... I'll probably get another $10k of another two Australian funds - more speculative mix - the small business ones and perceived undervalued funds. Then will play with another $10k tracking trades made by what I perceive as forum members with better track records, then probably another $10k of me going by gut feel backed up a little by some kind of basic charting

One thing I do wonder though is that a fund can be hot today - but what if the individual who is charged with running the fund moves on or burns out ? Id kind of like to know who the individual brains behind the fund is ... and get notified if it changes.

 

[akumaslair]

I might rephrase the my question to:

can somebody tell me ,or better still a link to a post or a site that has the basic
pros and cons of a
1. Local Managerd Share Fund
2. International Manged Share Fund (excl China)
3. International CHina Manged Share Fund (China)

taking in to consideration the past months actions, this would help me so much in coming to my final decision!!