Managed Funds Questions about managed funds

Hello,

Just have a couple of questions for you seasoned investors. I have about 10K available to invest in a managed fund. Most of the wholesale funds require about $25K to invest so I was looking at a Wrap account. I came across ANZ E*Trade which allows as low as $1K to be invested in managed funds. My question was, is ANZ E*Trade considered to be a wrap account ? My other choice is Perpetual WealthFocus which allows $2K as minimum investment.

Are there any other wraps with investment below $10K ?

Regards,
Calvinhobbes

 

Hi calvinhobbes

E*Trade is an oline trading brokerage firm.

Perpetual look OK. They have The Perpetual Wealthfocus Investment Advantage platform. Needs only $2000 startup. The MER (management expense ratio) is high at 1-2.5%. No financial planner is needed. And you can switch from one fund account to another and pay no CGT.

I haven't heard of any wholesale platforms that can be had for 10K.




Johny.

 

Drilled deeper into 4 accounts

I drilled a bit deeper into the following four accounts

1) Raboplus

Min investment : $250
Choice of funds : about 70
Entry Fee : Nil
Exit Fee : Nil
MER : as per fund
Brokerage : 0.25 to 0.75%

2) ANZ E*Trade

Min investment : $1000
Choice of funds : about 500
Entry Fee : Nil
Exit Fee : Nil
MER : as per fund
Fee : 0.66% charged to the cash account not to the money invested ( don't know what that means )

3) Perpetual and FirstChoice

Min investment : $2000 for Perpetual and $5000 for FirstChoice
Choice of funds : about 70 in Perpetual and some 110 in FirstChoice
Entry Fee : 4% max without financial adviser ( i think if i go through investsmart.com.au i can reduce this to 0%)
Exit Fee : Nil
MER : as per fund
Transaction Cost : about 0.20 to 0.3% ( I didn't understand what this is ...is this the buy/sell spread they are talking about ? )

 

Hi,

I can only give you my experience with CFS. I am very happy with my platform and the fee's. Tax time is super easy and the level of documentations for each quarter is precise.

I worked out that my overall MER is 0.7% and I am happy with that. I have chosen a financial advisor @ 0.44% taken from my cash fund. This has been worthwhile. He has actually come to my house and helped me with rebalancing.

I have made some redemptions and the money was in my bank acc. in three days. The CFS online service is very useful, but valuations are of the previous day. All trading needs to be before a 2pm receiving of orders.

One other thing; Because CBA owns CFS, business can be done at any of the Commonwealth branches.





Johny.

 

Thanks for the quick response and the helpful tips.

Can you please tell me what this actually means "I have chosen a financial advisor @ 0.44% taken from my cash fund".

So if you have $1000 in your cash fund , they take $4.40 per year ? What's exactly the cash fund ?

Also do you know what their transaction costs mean ?

Thanks,
calvinhobbes

 

calvinhobbes,

When I say 'cash' that means a cash management account. It earns the cash rate of 4.5%

My advisor charges 0.44% of my total portfolio per annum. In ordinary years (pre GFC) equity would rise higher and faster than cash. So by selling down my cash, my advisor is (normally) doing me a favour. ei allowing more compounding in my shares.

Advisor fees are negotiable but others might include:
Entrance fees 4%(?)
Exit Fees
Commissions
Performance Fees
Buy/Sell Fees 0.02%(?)
Trailing Fees
Trading Fees

As you can see, you and I are in the wrong job. Do yourself a favour and research index funds/ETFs. Those 4 platforms you mentioned should all have them.

Have you got a plan? Have you worked out what assets you are going to buy? ei Cash, FI, oz shares, int shares, commodities, emer markets, bonds, precious metals ect.. And which platform manager are you going to choose (and why?).




Johny.

 

Haha, we sure are in the wrong industry but it's fun to learn. The problem is the finance industry which makes it difficult by introducing all sorts of jargon into it. But I guess it wouldn't be fun if it was easy either.

I am still trying to understand the fees. I think the 4% entry fee would be waived off if I put in investsmart.com.au as my advisor. I can't escape all the other fees but that's ok.

I am already registered at E*Trade and Raboplus, so I will give E*Trade a try.

I am also going to call CFS as I am thinking of rolling over my super to CFS and want to make sure I dont get charged the 4% entry fee on that either.

As for the asset classes, I would like to invest 50% in Asian shares funds, 30% in bonds and 20% in Australian shares.

 

You're a stronger man than me. I have only got 13.6% of my foreign exposure invested in asia.

As well as investsmart.com why don't you try Sims new program investfree.com.au . If it is as good as his comparefunds.com.au I'd like to know.
Compare Funds :: Managed Fund Comparison Charts and Statistics





Johny.

 

Hey Johny,

Thanks for the links. I like the comparefunds one, it gives you the performance for past 10 years which is great. I am from India, so i do have confidence that companies there will give good returns. The Asian funds do have about 8-10% in Indian equities. I could not find a fund which is India specific otherwise I would have tried that.

What is your composition like ? Do you have an opinion as to which asset classes would do well in the next 3 years. For some reason, bonds are doing very well at this time.

Btw, I called CFS - i can waive the 4% entry fee if i go through investsmart or investfree which is great. I can move my Super into that, currently it's languishing in QSuper, which doesn't have many investment options.

 

calvinhobbes,

I too, have been looking for an indian specific fund.

My current allocation is:

http://www.invested.com.au/2/johny-portfolio-ver-1-01-a-37186/

Nobody can predict an asset class in the way that Nobody can predict the market. Studies has shown that asset allocation makes 90% of a portfolio's return.

So the best thing, is to have a bit of everything and regular rebalancing.

How old are you, if you don't mind me asking?





Johny.

 

Thanks Sim,

Will investfree save me from paying the 4% contribution or entry fee ? That's the most I am worried about as that will be a lot of money.