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Newbie - Minimum term in funds?

Discussion in 'Managed Funds & Index Funds' started by sage26, 8th Jun, 2007.

  1. sage26

    sage26 New Member

    8th Jun, 2007
    Hi, I am new to managed funds and need some info. Generally speaking is there a minimum term that an investor is commited to remain in a fund? I am looking at several funds atm and this is not mentioned in any of the PDS. I understand there may be a minimum recommended timeframe for investment, I am thinking along the lines of a change in circumstances where you need to redeem all units say sometime in the first twelve months. I don't think I would be in this situation but just checking in case.

    I want to check if there are any penalties involved if you pull out in a short time frame or if you are committed to a certain length of time. I can't seem to find any information on this. Am I overlooking information somewhere?

  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    9th Jun, 2005
    Sydney, Australia
    Depends on the fund ... some funds hold fairly illiquid assets, and as such may take time to redeem the cash to pay out the redemption ... but this will be clearly explained in the PDS.

    For a fund which purely invests in listed assets that are traded daily and has daily unit price calculations (which is the case for the vast majority of managed funds in Australia) ... there should be no minimum holding period for your units. In theory you could buy units one day and redeem them the next ... with the only penalty being the buy-sell spread that you pay on transactions.