There has been a lot of talk recently about the fees charged by superannuation funds and how they perform, with the topic under the spotlight of the financial services royal commission.
But when it comes to other kinds of managed investment funds, the factors an investor should weigh up are very different to the thought process for super fund members.
Researcher Chris Gosselin of Australian Fund Monitors says the two types of investment funds can have very different purposes, with super playing a very specific role in helping people achieve retirement income but managed funds potentially playing a range of financial functions.
“With these kinds of actively managed funds, investors and their advisers are making very conscious decisions to invest in that manager or fund to get a certain level of exposure, a certain type of return or to reduce their risk,” Gosselin told Trading Day, comparing this to super funds where many members are disengaged.
“We have a really strong view that if you only look at an investment based on fees then you’re going to come unstuck.”
Gosselin suggested investors approach managed funds the way they would a bottle of wine on a restaurant menu and look for where they are receiving value, not just go for the lowest price.