03 Sep 2020
We are all lured by quality diversified funds that deliver high returns. After all, the whole point of investing is to grow your money. But what we often don’t think about, are the fees charged to administer and manage these funds.
Do you know what you are being charged? High fees could cost you thousands every year. High returns that you would potentially receive on funds, could be significantly reduced if the fees are also very high. When investing, all we look at are the great returns, but often forget to look at the fees charged that could eat away at our profits.
• There are fund administrative fees, once off fees and if you are using an adviser or broker, adviser and broker fees. There might also be sub fund managers involved too that also want their cut.
Make sure you are aware of all fees before you invest in a fund.
• Actively managed multi manager funds tend to have higher fees because the funds are diversified and spread your risk, and managers are regularly adjusting the fund composition for best returns.
• Passive funds are generally cheaper as they track indexes and don’t get adjusted on a regular basis, but in times of volatility, it is often better to pay a bit more for actively managed funds to minimize any losses.
• Funds that offer high returns come with higher risk and often, higher fees. (parts take from gulfnews.com)
“The most common mistake that I’ve seen is an investor getting lured by high returns. While you may get too excited about the return side of it, you may not be able to understand the risks that are written in the fine print.” - Anita Yadav, market expert UAE
It’s not a question of saying that funds with high fees could cost you money. You need to sit down with your financial adviser and discuss the pros and cons of the funds and their fees, and then decide which funds will be beneficial in the long term. It’s all about making an informed decision once you have all the facts.
Your deVere Acuma adviser will sit with you and discuss the various fees and returns of funds and make a recommendation according to your financial goals and circumstances. [email protected]
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere Acuma adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.