Managed Funds Managed Fund Provider

Have been looking at 2020directinvest with eWrap option, and tossing it up against buying funds through etrade (Ausmaq)

Now i know that through etrade/ausmaq the funds are held in trust and i would not be able to inspecie transfer and possibly forgoe a few other benefits, but factoring in MER's and bulk rebates and stuff, which service would be generally cheaper for managed funds?

Etrade - ongoing portfolio admin fee of 0.66%,
2020direct Personal Choice eWrap (asgard) 0.86% admin fee on first 100k, 0.64% next 150k.
MER rebates equal on both?

0.2% difference is peanuts if one is a much better platform/service provider.
Any thoughts? what do you guys use? am i missing anything in my comparison?

 

"2020 rebate the entry fees so that all your money is invested with no upfront entry fee taken out. Why do you have to be "penalised" with entry fees if you are investing yourself? 2020 make money by being paid a trailing commission by the Fund Company of approximately 0.3-0.6% p.a.. This is paid by the Fund Company and is NOT an additional charge to you. So a "win/win" situation for both you and 2020!"

If you use Investsmart.com.au then they will rebate the full entry fee and also rebate the trailing commissions beyond $396.

http://www.investsmart.com.au/my_trailcap/easy.asp

"TrailCapTM has been designed to simply save you money on your managed investments. As with all managed fund investments via InvestSMART you pay NO entry fees, plus you also receive a cash payment from InvestSMART for any trailing commissions we receive from participating fund managers on your investments above $396 pa!*"



So if you are investing +$100k then the best option would appear to be the investsmart crowd as you will get any additional trailing comms.

Cheers

 

Investsmart also have a great portfolio online monitoring tool.

I am finding them quite useful and the trailcap is a bonus that will see the kids get schoolshoes this year.

 

am still liking etrade for managed funds at this stage (but look forward to any arguements against). I will have to look a lot closer at the MER's and the portion rebated.

Etrade seems to integrate well with a choice of margin lenders. Is interesting how Etrade (anz owned) use Ausmaq (NAB owned) to do the managed funds. Then St George rebadge etrade for their own direct shares/ fund trading also. it is an inbred world. I am sure their are many more examples like it out there.

Cheers for the tip on Investsmart

 

I do use the rebadged etrade with BankSA for shares, managed funds are a no no with them if your using a margin loan <insert word/s of choice here> knows why.

Investsmart is my current managed funds broker of choice due to the trailcap. Directaccess may have a better search for funds function though.

 

Cheers Bundy

Why is it a no no investing managed funds with etrade? Is it poor transactions times, complications with ownership/LVR approval?

They appear to have 3 margin lending providers (anz, st george and BT), the later 2 allowing investment to 1000+ wholesale managed funds.
I know an anz margin loan will not allow you to buy funds.

I look forward to your comments.

 

Borrowed from their website Just bolded the relevant bit.

Even my margin lender has no idea why they do it that way but let you use investsmart and others by sending in the forms through them.

I could open another account with them with another cma and transfer cash across and lose the ability to leverage the value of the funds. Not for this little black duck at the moment.

 

Thanks Bundy

That sorts that query out. Etrade go to the bottom of the list.

Those of you who use Investsmart, are you limited to macquarie margin loans? I was hoping to transfer my BT one as it is already in place.

 

I have used my BankSA margin loan with Investsmart with my AMP fund with no problems.

 

having a look at etrade, St George margin lending allows investing in funds, and includes navra funds at 75% LVR

 

voigtstr,

etrade are a bit false in there advertising. if you go to the margin loans section of the etrade web site, and click on margin loan comparison, it appears the st george and bt loan have the ability to buy 1000+ managed funds through etrade.
However, it just means you can use a portion of the established margin loan to buy managed funds through BT or St George direct(completely independent of etrade/ausmaq)

so basically, as pointed out by bundy, funds can;t be purchased on margin. only with your own money. Why? who knows . weird.

 

by the way, i got this info by ringing etrade, so it is probably wrong.

 

Laugh out loud (I wanted to say simply LOL but that was too short)

 

Hi,
We are opening a wrap account through 2020 Direct invest, but only because it is the only way we can access some of the exclusive China wholesale funds. Apparently if we apply for a margin loan through them too, they can get us a much cheaper rate. (yet to be tested)

I don't think Direct Access and similar sites can give small investors access to the wholesale funds. eg. CFS wholesale fund requires 100k minimum investment, but through the 25k Wealthtrac e-wrap we can access some of these CFS W/S funds with just a few thousand dollars, instead of 100k. So I think the real value of these e-wraps is in giving smaller investors access to previously unattainable wholesale funds. Rebated entry fees and reduced MERs are just icing on the cake for us.

Cheers
Seaview

 

I use St George for my margin loan because of the excellent LVR's they provide, but it took me a while to work out how to purchase managed funds - I thought I needed a broker such as ETrade but eventually realised there's no broker at all (unlike direct shares) - with managed funds you can just send the application form (from the PDS) to the margin lender and ask them to purchase the funds. One of the previous posts here mentioned a broker, but it's not the case.

Where the entry fee to many funds pops up is actually a fee paid to a financial adviser - not to a broker. And to stop people cutting the adviser out of the loop, if you have no adviser you generally forfeit the fee by default. So a mob like InvestSmart actually acts as your adviser (NOT broker) and accepts a 0% fee up front but gets the trailing commission (capped).

You don't actually "go through" InvestSmart at all. You just download the PDS from their site and it will be pre-populated with their adviser number. Just print it off, fill out the form and send it to St George who will in turn send it to the fund manager for the purchase. The fund manager will then know to send trailing commission to InvestSmart as your registered adviser.

Hope this helps clarify things - it really is a very simple process but it took me a while to grasp!

 

thanks remorseless. you have clarifyed perfectly. champion.

..but surely i can not out source the paperwork and just send an application form (on approved list) to the margin lending provider to fill out?

or do they actually act as paper monkeys and fill the form for you and fill in your TFN. address and the like?

this sounds good.

 

I think if you sent the lender a blank form it would go into the too hard basket or your returns may be paid into a Swiss bank account.

 

Bundy1964's correct - I didn't mean to send a blank form. So the process is:

- Download form from Investsmart etc., which will have their adviser number already on the PDF.
- Fill out the form in your own name for purchase of funds.
- Give your margin lender some equity - cash, shares or additional funds.
- Send the form to your margin lender with a cover letter asking them to execute the purchase on your behalf, from your margin loan.

At least that's how it works with St. George.

 

what happens if you already have money in a fund through etrade and then want to get more through a margin loan? If etrade dont let you buy more via a margin loan would you have to withdraw the lot and reinvest it (perhaps through investsmart so you can use their portfolio tool?)

 

Yeah i figured that one out - was silly of me to think a blank form would suffice.

and this etrade thing has me beat too. I don;t think the margin lender would be able to accept the etrade fund as being lodged for security cause it is held in trust through ausmaq. Actually i would not know, but i gave up on etrade cause the employees on the phone did not really know much either. They always said contact margin lending provider. Margin lender naturally knows nothing of etrade products outside direct shares so they say ask etrade. i gave up.

smartinvest looks good to me, and seems plenty of others on this site are using them. With etrade, even if the funds are wholesale, once the 0.66% portfolio fee is added on prob not much advantage anyway. would have to crunch figures closer. Lot more flexible having beneficial ownership in own name to.
As nicely put into words by remorseless, the process is sweet.