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Healthcare index fund

Discussion in 'Managed Funds & Index Funds' started by hatemalaa, 10th Nov, 2019.

  1. hatemalaa

    hatemalaa New Member

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    Hi, I searched a lot for a healthcare "index" fund but couldn't find. I only find healthcare ETFs. Can someone recommend one?
     
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  2. Hodor

    Hodor Well-Known Member

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    ETFs frequently are index funds. What exactly are you after?
     
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  3. hatemalaa

    hatemalaa New Member

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    As far as I understand, there is a bit difference between index fund and ETF. I'm not interested in ETFs because I want to setup a regular - fortnightly- investment, and with the broker fees, the total fees will be huge.

    If no index fund, I might go for mutual fund incase you know any good performing healthcare mutual fund.
     
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  4. Hodor

    Hodor Well-Known Member

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    Mutual fund is a very American term.

    The Australian healthcare index funds I am aware of is iShares Global healthcare ETF (IXJ) and BetaShares (DRUG) which is hedged - Both are ETFs

    Platinum offer a managed global healthcare product (not an index fund).
    Platinum International Health Care Fund - Platinum Asset Management
    This will allow regular automatic deposits.

    ETF is a structure and index funds are a fund with a specific strategy. Most larger ETFs are cap weighted index funds.

    Huge compared to what? An ETF index fund is a super efficient way to invest so the Management expense ratios (MER) are generally small compared to an actively managed product and smaller than unlisted index funds that allow regular investments (especially if you don't have funds to access wholesale versions).

    The ETFs both have MERs around 0.5%, the platinum managed fund is 1.35% or 1.1% + performance fees (there needs to be large out-performance to beat the cheaper index ETF so if you aren't playing this you are much better off in the index).

    Anyway, my point is this. This difference is ~0.85% in fees.
    If you have $10,000 invested you pay $85 p.a. extra in fees.
    $50,000 is $425 p.a.

    That is A LOT of brokerage, Self wealth has $9.50 trades for any size. Once you have $30,000 invested it is actually cheaper to pay the brokerage every fortnight than paying the additional management fees. You can stop paying brokerage at any time, the management fees are forever.

    There are behavioral issues etc to consider also aside from costs. 0.85%p.a. in additional fees is large so those reasons would want to be strong.
     
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  5. hatemalaa

    hatemalaa New Member

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    That is extremely useful Hodor! Thank you so much. I keep reading it a lot:)