How much does it cost to invest?
Managed funds have lots of benefits - professional management and the ability to diversify being just two of them. But when it comes to the fees and charges involved, it can seem a little complicated.
Like any professional service, the fees fund managers charge are used to cover the costs they incur when investing and managing your money. This guide is to help you understand the different types of fees that you may be charged when you invest in a Colonial First State fund. You should also read the 'fees and other costs' section of the relevant Product Disclosure Statement for full details of the fees that apply to your investment.
Understanding fees
Fund managers don't all charge fees in the same way. For example, some charge entry fees, while others charge exit fees.
At Colonial First State, the fees charged generally fall into one of three categories:
- Fees charged when you move your money in or out of a fund, including contribution fees, withdrawal fees and termination fees.
- Management costs are the fees for managing and administering your investments.
- Service fees include adviser service fees, special request fees and switching fees.
And then there are Transaction costs, which apply whenever you contribute, withdraw or switch from one fund to another.
What is a transaction cost?
When you buy or sell units in a fund, transactions costs are involved. These include charges such as brokerage and stamp duty. To cover these costs there is usually a small difference between the purchase price and selling price of the units, which reflects these transaction costs (often known as the buy/sell spread).
You should check the Product Disclosure Statement (PDS) for details of the specific fees and charges that apply to the managed fund you are interested in.
ASIC's consumer website FIDO also contains useful information about managed funds and fees:
What to consider next
Speak to your financial adviser or choose an option here:
The information contained in this document is based on the understanding Colonial First State Investments Limited ABN 98 002 348 352 AFS Licence 232468 has of the relevant Australian laws as at 1 July 2009. This document is not advice and is intended to provide general information only. It does not take into account your individual needs, objectives or personal circumstances. You should assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. Product Disclosure Statements (PDS) for products offered by Colonial First State are available from colonialfirststate.com.au or by contacting us on 13 13 36. You should read the relevant PDS and consider whether the product is right for you. Past performance and awards are no indication of future performance.