Managed Funds Low MER but not Index Hugger

Discussion in 'Shares & Funds' started by benbegg, 5th Sep, 2008.

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  1. benbegg

    benbegg Active Member

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    Can people make some suggestions on a managed fund that invests in Australian Equities and is not an index hugger (so does not just copy what the index does). I am considering the Vanguard Australian Share Index as my core holding and then looking at 'high conviction' or 'concentrated' funds on the side. I have read a lot of books about how you can't beat the index but I still feel that there are fund managers that can do this at times. I am happy to make a larger (> 10K) initial contribution. I already have funds in the Colonial First State Wholesale Funds and some of the funds in there have held up well. In particular the Australian Share Fund managed by Challenger. I also quite like the look of the Navra Fund as it takes an 'alternative' view on things and to be honest in such a volatile market you need to take that approach. I am pretty risk adverse but am not interested in funds that hedge using CFDs but am OK with funds that might use options to protect the portfolio. I feel that the smaller fund seem to act more quickly when things change. From my reading I have seen that some fund managers seem to trade a lot and as such their distributions have a lot of tax to be paid on them. I look forward to your comments.
    Benno
     
    benbegg, 5th Sep, 2008
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  2. Simon Hampel

    Simon Hampel Founder Staff Member

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    What do you mean by "low MER" ?

    Is 1.5% too high? 1% ? 0.5% ?
     
    Simon Hampel, 5th Sep, 2008
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  3. benbegg

    benbegg Active Member

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    Well I would say under 1% is OK. I would consider wholesale trusts as a suitable medium as I don't go through an investment advisor.

    Cheers

    Benno
     
    benbegg, 5th Sep, 2008
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  4. Simon Hampel

    Simon Hampel Founder Staff Member

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    How much do you have available to invest (you mentioned > $10K) ... I don't know of too many wholesale funds which require less than $100K or $250K to invest (although I think there are some Perpetual wholesale funds @ $50K minimum).

    Sorry I don't have any specific suggestions about Australian funds, other than I like Navra for income (1.5% MER) and STW as an index-tracker.

    Unfortunately I haven't been able to get Vanguard data suitable for my Compare Funds website to do comparisons - but you can see Colonial, Perpetual and Challenger funds there amongst others.
     
    Simon Hampel, 5th Sep, 2008
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  5. benbegg

    benbegg Active Member

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    Hi Sim

    I have over $100K available so I can go into a wholesale fund for example. What I did with Colonial was invest $75K in their Cash Fund and $25K in a number of their Australian Share Funds and then I withdrew the $75K so I now have a smaller holding in the Wholesale Fund.
    I am considering STW as it does have a very low MER and even though the entry fee is dependent on the broker.
    I like Vanguard as I can invest smaller amounts more frequently so can average into the fund.
    Cheers
    Benno
     
    benbegg, 5th Sep, 2008
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  6. Simon Hampel

    Simon Hampel Founder Staff Member

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    That's the problem with the ETF - it's not as cost effective to do regular automated investments as it is with a managed fund.
     
    Simon Hampel, 5th Sep, 2008
    #6