Managed Funds Newbie's question - is monry in fund safe

Hi,
I am new to managed fund, I have a silly question before start. How do I know the fund manager will not take your money away and leave you bankruptcy, I heard some story such as Trio... ? thank you in advance.
David

 

You can go to the morningstar website and have a look at the star rating, generally the higher the rating, the stronger management skills they have. But that is not the whole story, some of the funds which do not have the rating still perform well. But if you are new, you can stick to the rating, and looking at the past performance such as the past 3 years return etc.

 

Hi,

When you invest in a Managed Fund you are getting units in a Trust. The portfolio manager / fund manager does not own those assets but merely manages them on your behalf. The manager/Responsible Entity will have a fiduciary duty to look after the assets in the best interests of unit holders.

That said there is nothing stopping them making bad investment decisions or share markets going down. As luyaoqin said, check out Morningstar for some of the 'higher rated' funds.

Lastly, past performance is no indicator of future performance. What worked for a manager last year may not work next year.

J.

 

The star system does not protect you from fraud.





Johny.