Join our investing community

Managed funds or Shares

Discussion in 'Managed Funds & Index Funds' started by JohnRR, 17th Jul, 2007.

  1. JohnRR

    JohnRR New Member

    Joined:
    17th Jul, 2007
    Posts:
    4
    Location:
    Sydney, NSW
    I am looking at making some small investments in either shares or managed funds. I don't know a lot about either, however am keen to do something.
    What do you think is better, and how best can i save on fees?
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Do you want to do it all yourself or are you happy to outsource to an investment manager ?
    Do you want a widely diversified portfolio of shares or would you rather concentrate your money into a few carefully selected and monitored shares ?
    Would you prefer to minimise your costs or are you happy to pay for expertise ?
    Do you have a large sum of money to invest up front, or are you starting small and looking to add to your investment as you go ?
    Are you expecting to buy-and-hold long term or are you likely to trade in and out as the price moves ?
    Have you considered real estate ? :D

    Sorry to answer a question with more questions - but there's no one right answer!
     
  3. JohnRR

    JohnRR New Member

    Joined:
    17th Jul, 2007
    Posts:
    4
    Location:
    Sydney, NSW
    Hi Sim,
    I would like to do it myself, as id like to learn, and am cautious of fee's etc. A diversified portfolio or few carefully selected shares i am not sure about, but welcome your thoughts. Property would be good, but iam still paying off our home and do not want to commit to another place. I have about $20,000 to invest and would like to add to this each month. My superannuation has done pretty well which is why i started looking at shares or funds?
     
  4. Tim

    Tim Well-Known Member

    Joined:
    27th Jun, 2006
    Posts:
    111
    Location:
    Lismore NSW

    John,

    I would be inclined to jump onto morningstar, do some research on managed funds and then used Commsec to download the PDS so you can bypass the 4.0% entry fee. If you are not experienced in shares you might find the cost of buying and selling impacts on your profits, etc

    Tim
     
  5. Bantam Roosta

    Bantam Roosta Well-Known Member

    Joined:
    7th Feb, 2007
    Posts:
    115
    Location:
    Canberra, ACT
    I would look into LICs (Listed Investment Companies) and ETFs (Exchange Traded Funds). They are like managed funds but are traded on the Stock exchange. This way you get to diversify your cash, but also learn a lot more about the market and how it all works and because you already have your broker set up, it makes it very simple when you decide to dip your hand into direct share purchases.

    The fees are much, much lower than managed funds as well, so by the sounds of it you would like them.

    BR
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    I prefer managed funds to LICs and ETFs because there is an extra variable in determining the price of these types of listed investments - sentiment (ie the share price doesn't necessarily represent the real value of the assets held by the entity). This does potentially produce buying opportunities where you can buy in for less than the entity is technically worth, but on the flipside, there are times where it is technically overpriced.

    I prefer managed funds because they are (generally) very transparent and the unit price accurately represents the value of the investment at the end of each day. The fees can be slightly higher with funds - but that alone shouldn't determine their worth.

    At the end of the day, you should do pretty well with a portfolio of carefully selected LICs, ETFs or Managed Funds.
     
  7. Bantam Roosta

    Bantam Roosta Well-Known Member

    Joined:
    7th Feb, 2007
    Posts:
    115
    Location:
    Canberra, ACT
    A valid point and at those times you don't buy, although there is normally at least a few LIC's lagging at any one time.
    Most definitely agree with this comment. I started with Managed funds, and still hold four different funds, but I'm slowly cashing out my Australian ones, and moving into LIC's and direct shares. For Asian exposure, I'll be sticking with Platinum. :)

    BR
     
  8. crc_error

    crc_error The Rule of 72

    Joined:
    1st May, 2007
    Posts:
    1,367
    Location:
    Melbourne, VIC
    Hi John,

    If you want to do it yourself, I would recommend subscribing to a shares newsletter. I did subscribe to the Rivkin Report a while back and found it to be good. They have a weekly radio show which members can email and ask questions. Its a good place for new people (even experienced people) to start and learn. You can also listen to questions what other people ask. Plus they make recommendations which you can research further, look at their reasoning on why to buy, and make purchase decisions that way.

    I also subscribed to the Freeman Fox news letter. I found the Rivkin one more educational, however the Fox recommendations were good as well. The fox one seemed to be more 'buy and hold' whereas the Rivkin one tends to sell out more often, but isn't a 'trading' system as such.

    For the $700 annual fee, I think its worth it, rather than throwing darts blind folded!

    I personally don't recommend trading, there are all these charting systems, but I reckon your better making decisions on fundamentals, like the two newsletters promote.

    Tom
     
  9. PaulA

    PaulA Member

    Joined:
    13th Jul, 2007
    Posts:
    9
    Location:
    Sydney
    You can also use YourShare to download the PDS and bypass the 4.0% entry fees. YourShare will also send you a cheque every year for 50% to 70% of the annual trailing fees paid over your managed funds, super, etc.
     
  10. crc_error

    crc_error The Rule of 72

    Joined:
    1st May, 2007
    Posts:
    1,367
    Location:
    Melbourne, VIC
    Invest smart does a simular thing.. Actually they did that trailing rebate years ago!
     
  11. PaulA

    PaulA Member

    Joined:
    13th Jul, 2007
    Posts:
    9
    Location:
    Sydney
    Thats true, but they do not rebate trailing commissions from ALL fund managers whereas YourShare does. Also YourShare even rebates trailing commissions over your insurance policies.
     
  12. crc_error

    crc_error The Rule of 72

    Joined:
    1st May, 2007
    Posts:
    1,367
    Location:
    Melbourne, VIC
    yeh I noticed that, I was wondering if someone was out there who rebates TPD, Life and trauma insurance, as they pay something stupid like 40% PA in trails.

    Do they also rebate things like car, house etc insurance?
     
  13. PaulA

    PaulA Member

    Joined:
    13th Jul, 2007
    Posts:
    9
    Location:
    Sydney
    Hi crc,
    Basically any insurance product that pays a trail YourShare will rebate against. Insurance trails are not as straight forward as managed funds, super, etc. Life, Trauma, Disability seem to carry the highest trails. But contact YourShare and tell them the insurance provider and product, and they will advise exactly how much trail your currently paying. YourShare also rebate 100% of upfront commissions.
    For the record i am associated with YourShare - so think its a great product. But if you know of any better deal, let me know
     
  14. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    Before you follow other people ideas you should get basic knowledge about Stock Market.
    The only sensible way to go before you commit your money in direct shares or funds, is to learn as much as you can from books, seminars etc.
    :cool:


    crc_error (I like your nick name!)

    Incidentally well known 'guru' R.Rivkin made a lot of money NOT as a Stock Market investor BUT as an art/antiques dealer. :eek:
     
  15. crc_error

    crc_error The Rule of 72

    Joined:
    1st May, 2007
    Posts:
    1,367
    Location:
    Melbourne, VIC
    Thanks!

    Maybe Rivkin made money from art etc, but he still had 30 years plus experience in the sharemarket, which would suggest he would know something and can pass some knowledge on to someone who knows nothing!

    Its just like saying the owner of Platinum Asset Management made his money from running a funds management business.. Maybe he did, but he still is good at investing.
     
  16. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    "Maybe Rivkin made money from art etc, but he still had 30 years plus experience in the sharemarket, which would suggest he would know something and can pass some knowledge on to someone who knows nothing!"

    His experience was mainly based on insider trading/activity...
    Before he ended up in jail he managed to make $300 in Qantas shares. :rolleyes:
    You are right, he probably knew how to swim in a dirty water.