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Investing in a managed fund

Discussion in 'Managed Funds & Index Funds' started by Muzza, 14th Jul, 2008.

  1. Muzza

    Muzza Active Member

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    23rd Nov, 2006
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    Location:
    Brisbane
    Hi,

    Im looking to invest a small amount of money into managed funds - probably starting with around $1000 and looking to put in between $250 and $500/month ongoing. Ive looked at a site called Raboplus and they seem to offer a lot of funds with a small amount of fees. Have specifically looked at the Colonial Aust share and global resource funds as they seem to have good returns and I dont mind a bit of risk.

    Am I on the right track or is there a better (cheaper) way to get into managed funds?
     
  2. S4OZ

    S4OZ Member

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    I use Managed Funds and Other Investments which offers most of its managed funds with a 100% entry fee rebate or $0 entry.

    They also offer rebates on on-going commissions, once you meet certain criteria. My understanding is that if they don't get commissions the funds charges them anyway and keeps them, so at least this way you get a little back.

    Seems ok, I am happy with the nil entry fees. Plus it was a bonus when I received a $400 cheque from them 12 months later, being the on-going commissions rebate.
     
  3. johk

    johk Member

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    Muzza,
    I am in exactly the same boat - start of with about 1000 and the put in 250/2w.
    I am still tossing about Raboplus or Investsmart.
    What got my attention re. Invetsmart was that you have to write them a cheque (see step 3 100% Entry Fee Rebate on Managed Funds) to send them with the application form for the selected fund. It seems a bit excessive if I have to do that every time I have to buy funds (to not mention the fees for the cheques). While with Raboplus you have access 24/7 (but the orders doesn't get processed until 1.0pm).
    Also I could not find the min. invetsment you could do.

    I presume that with both of them you can buy spread your investment between any funds (that is listed on their websites).

    Am I missing something here re. Investsmart?

    Thanks
    J
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Yes, I think you misread the instructions in that step.

    You don't send it to InvestSmart - you send it to the fund manager with the cheque made out to the fund manager. The fund manager knows it came from InvestSmart because the PDS you download from the InvestSmart website has their details in it.

    Also, you don't have to write a cheque - you can invest however the fund manager lets you (some allow direct credit, direct debit or bpay options too).
     
  5. crc_error

    crc_error The Rule of 72

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    You can't invest via investsmart. You invest directly with the fund manager. They don't provide a wrap service. For $1000 investsmart will do nothing for the investor. you need at least $100,000 invested before you start to see fee rebates.

    Since via investsmart your investing directly with the fund manager, most funds will have minimums, like $1000 per fund or $10,000 etc..

    Your best bet is to go with someone like colonial, they will allow you to select several managed funds, with a min of $1000 providing regular investing is setup.

    I like netwealth, as they give you many more funds to choose from and also have nil entry/exit into funds. They also invest into the wholesale funds which charge lower fee's. However your entry into netwealth is $10,000.

    check out yourshare as well, they are like investsmart, but I think they offer better value. again, you invest directly with fund managers, they don't provide a wrap service like netwealth.

    Maybe consider borrowing $10,000 via a personal loan/parents etc and invest via netwealth onto a few quality managed funds. Your interest will be tax deductable. Repayements will be something like $200 per month. the leftover cash you have after paying the loant you can invest into buying more new units in your funds each month.
     
  6. johk

    johk Member

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    Thanks for your replies - I appreciate your comments.
    It seems that yourshares website is down at the moment - but do they also have a min. limit of 100' or 10'?
    I do realise that the markets have gone down and that maybe taking a margin loan might be a good to get a "jump". But I am just starting out and want make sure that I get it right. One thing at the time :)
    What about RaboPlus? They seem to be more geared towards a smaller investor as myself?
    They have an entry fee of 0.75% and no exit fee - which I believe means you don't pay anything when you sell a fund.
    Thanks
    J
     
  7. crc_error

    crc_error The Rule of 72

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    I had a look at Rabo plus, and found their investment menu is very limited. They didn't have the funds I was wanting to invest in. Something like direct unlisted property funds like cromwell or orchard are not accessable by many providers, unless you invest direct.. then you have larger mins to get in.

    Also with the smaller amount of money your investing, fee's are not a big issue. 1/2% on $1000 is only $5.. so are you going to worry about $5 per year?

    If you find they have the funds you wish to invest in, then yes they are a good option to consider. They also get you into the wholesale fund versions which is good.. I think most wrap providers do invest your money into wholesale fund versions anyway.

    Yourshare also invest your directly into the managed funds, so the min's will be decided on by the fund manager, so it will be the same as investsmart.

    To get smaller entry amounts, you need to use someone like Rabo, netwealth or colonial, who are wrap/platform providers. Yourshare/investsmart is simply a non-advise adviser who collects the trails from the fund managers, and is supposed to provide you with advise in return.
     
  8. crc_error

    crc_error The Rule of 72

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    double check if you can use margin loans to invest via Rabo.. I know with netwealth there is a choice of 3 margin loan providers who support them. you can't use every margin loan with every wrap provider.

    If your using a margin loan, I would stick to a lower LVR of 30-40% during these volatile times.
     
  9. johk

    johk Member

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    I did check with Rabo and they don't offer any margin loans - but they said that they are working on it.
    Yeah they don't have a very big selection of MF to select from - but they are a cheap alternative for a small investor like me.
    As you say the fees will be minimal for me as well as I am not investing that much.
    At the moment I am looking in to what to as we have to refinance our mortgage beginning of next year. We have more than 200' equity and I am sure there most be a way for us to utilise that for further investment. I have read thorough the articles "Living on equity" and that really got me thinking - very interesting and educational.
    Thanks
    Jonas
     
  10. voigtstr

    voigtstr Well-Known Member

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    there is another company similar to investsmart called YourShare - managed fund that you might want to compare as well.