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How to get started with Colonial First State and InvestSMART

Discussion in 'Managed Funds & Index Funds' started by pinkeye, 31st Oct, 2007.

  1. pinkeye

    pinkeye Active Member

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    Hi investEd forum,

    I am planning to buy into several managed funds. I saw that I can use a platform like Colonial First State to keep things in one place (rather than sending off individual checks and applications) and simplify things at tax time, and also that I can use a broker like InvestSMART to get 100% rebate of the application fees.

    But I have a couple of questions...

    * I understand that there are additional management fees to hold funds through CFS or similar platforms. I am prepared to pay a small amount for the benefit of simplified management and reporting. Is there any compelling reason not to use CFS or a similar platform to manage multiple funds? i.e. are the fees reasonable, do you use such a service yourself?

    * How can I use the CFS platform in conjunction with the InvestSMART broker? My dilemma is that if I print off the applications at InvestSMART and send to the funds, they will not go through the CFS platform; but if I apply through the CFS platform then I will not get the rebate through the InvestSMART broker! What is the correct procedure here?

    Thank you in advance, Anthony
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    If you look at the CFS website, they have a list of 3rd party funds that you can invest in ... you can't just invest in any fund through CFS, only in the funds they specifically allow you to.

    You would apply to InvestSMART to invest in these CFS version of the funds ... so your investment would actually be with CFS, even though the money is managed by the other fund manager.
     
  3. pinkeye

    pinkeye Active Member

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    Hi Sim,

    I am starting to get the impression that buying these target funds as CFS funds is adding an additional layer of fees and complexities in itself (vs. buying the target funds directly). Yet the CFS funds seem popular on this forum...? :confused:

    Do you use a platform, or do you buy your target funds directly? Just send out a lot of checks, receive a lot of statements and put everything in to your excel at tax time...? :cool:

    Thank you, Anthony
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I think you'll find that the funds that are actually managed by CFS themselves as fund managers (and not just platform managers) ... are the ones which are popular.

    In general I would go directly to each fund manager and not via a platform ... unless 1) I really really really wanted to simplify my reporting at tax time, or 2) by using the platform I could get into a fund that I otherwise wouldn't have access to (typically this means wholesale funds), or 3) my margin lender actually gives a better LVR for a platform version of a fund than for the real fund itself (strange but true !!)

    I have several cases of 3) above where it proved to be better for me to invest via CFS to get a better LVR on my margin loan than to invest directly :eek:

    One example of point 2 above might be Platinum International ... if you invest directly via Platinum, you need a minimum $25,000 to invest, but if you invest via CFS FirstChoice, you only need a minimum of $5,000 (or $1,000 if using regular contributions).

    By the way - just FYI it is useful to look at the APIR codes for funds ... for example Platinum International fund has an APIR of PLA0002AU if you invest directly via Platinum and FSF0409AU if you invest via CFS FirstChoice (retail), FSF0505AU if you invest via CFS FirstChoice Wholesale, and WFS0092AU if you invest via BT !!

    Each of these options have different minimum investments and different fee structures ... even though at the end of the day, it is Platinum who invest and manage all of the money in their fund, no matter where it comes from!
     
  5. pinkeye

    pinkeye Active Member

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    Makes sens, thanks! :)
     
  6. tailcat

    tailcat Well-Known Member

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    Are there any benefits of using a platform when switching?

    Tailcat
     
  7. crc_error

    crc_error The Rule of 72

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    Platform is good if you want to have regular contributions setup. If you have 7 different funds, and want to invest $500 per month.. its going to be more costly to send out 7 $80 cheques.. and thats if they accept such a small contribution..

    Personally I invest directly where I can as I don't invest monthly as such.. but in any case I want to invest into CFS global resources wholesale, so I'll be opening up a CFS account soon.

    Using CFS for someone starting out is probably a good idea.. or using their wholesale fund range where possible.. - get lower fees.
     
  8. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Yes!

    CFS is great in that they process switches very quickly (even via my margin lender) - when I fax instructions for a switch to LevEq before about 11am, the transaction is processed by CFS the same day, using the unit prices on that day (which you don't actually know until the following day :( ).

    You still generally pay a buy/sell spread for switches, but you avoid the opportunity cost of waiting for days (or weeks!) to get your money before making the new investment.

    If you want to "cash out" temporarily for whatever reason, you are better (with CFS anyway) to do a swap to one of their cash funds rather than actually withdrawing the cash ... this way you can swap back in again just as quickly.
     
  9. Sticks

    Sticks New Member

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    This is my first reply as i'm new to this investing caper, so it may be an inappropriate question.

    But are there any standout platforms or managers to get access to these funds? I ask this as i'm looking to join a couple of funds early next year with an appropriate margin loan. As my parents got me started with commsec, i was wondering if there are more efficient methods of getting into multiple funds from different managers while keep track of them?...If this makes sense

    Mitchell
     
  10. AsxBroker

    AsxBroker Well-Known Member

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    Hi Sticks,

    As Sim said a Platform is great for reporting at tax time and also accessing multiple fund managers through one platform.

    Cheers,

    Dan
     
  11. crc_error

    crc_error The Rule of 72

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    and allows you to regularly contribute to all your funds in one go, every day if you wish!