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Fund costs ?

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kwagga
Super Contributor
How many of you know the real fees your fund manager charges for managing your investments? Here is a benchmark of one of the better known funds managers in SA. Their local equity fund benchmark is CPI+8%. Any profit made over and above that benchmark they take 20% performance fees on. My question is this - Is it fair to charge that on top of a monthly admin fee? Is it fair of them to draw new investors with reports on total performance, when you will only ever see a fraction of that performance (after performance fees) in your pocket at the end of the day? What constitutes their claims on performance anyway, when they hit a bullish year and the ALSI moves 28% in one year? This is really just a baffle with bull***** industry to begin with in my opinion.
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5 REPLIES 5
THRESHOLD
Super Contributor
AND the legislation is designed to ensure that the poor schmuck in the street winds up having to go to large institutions who likely as not provide liasons know next to nothing and care even less; then buys some opaque, rip-off porduct that is sold to him by a slick sales team that cares nothing for consumer protection acts and knows the client cannot afford access to the law in order to seek redress.
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Not applicable
It is unfortunate that we cannot buy business executives (and Fund Managers) for what they are worth, and then sell them again for what they think they are worth. - Malcolm Forbes. publisher.
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CHATTYCHAT
Super Contributor
Kwagga- your main concern is that a bullish market favours the fees of the fund manager. Fact is - the investor benefits, and so does the fund manager. When you visit the doctor he charges you per visit, irrespective of the result of earlier treatment. Same with the fund manager - when the market turns bearish, tough luck to the investor - fees have been paid, the market determines future results. The high fees in your example most probably goes with a high-risk product. The investor has to be made aware of the TER ratio - and should walk away when the ratio is too high - its like switching to another channel on TV.
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kwagga
Super Contributor
Fund manager fees are based on entitlement. Hope there is a Capitec for fund management soon to turn the industry on it's head.
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DST
Super Contributor
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