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Are fund managers worth all that fees?


fundManager


A common perception that people have on actively managed investments is that it is expensive because of the management fees which typically range from 1.2% to 1.5%, as compared to passive funds where management fees are as low as 0.4%. It is true that actively managed investments tend to have higher fees but there are good reasons why.


Just like how anyone who have a job should be paid a salary, fund managers are also working professionals like us who have bills to pay or families to raise. There is a huge amount of intense research, analysis and sound decision-making process behind which requires time and money to achieve. And this is a full-time job for a fund manager which merits a certain amount of fees along with it.


For those who are new to investing, let us tell you why investing into an actively managed fund, also known as unit trust or mutual fund, isn't as expensive as you think.


Managed by professionals

A fund manager is responsible for implementing a fund's investing strategy and managing its portfolio trading activities. Regardless of your investment amount, any investor can have access to a professional fund manager who monitors your investment on a daily basis and make strategic decisions to help achieve the fund's objectives on your behalf. A fund manager, will also evaluate market conditions, mitigate market risks, identify the potential impact of a crisis and choose to avoid exposure in a given region or buy at depressed levels. Most of the funds on dollarDEX are actively managed by professionals and by leaving it to them, means you have more time to focus other important things in life.


Diversification and easy access to different types of investment instruments

A unit trust is like a basket, and that basket holds assets, like stocks. When you buy a unit trust, you purchase a unit of the fund. This also means you have ownership in an investment vehicle that owns an investment by pooling your funds with other investors. This means you are already diversified when you invest in a unit trust. Investing in unit trusts also provides access to various investment opportunities that you would not have been able to access in your individual capacity.


Access to timely information

Because fund managers spend a great deal of time keeping track of the performance and has the expertise to do so, they spend time visiting the companies that they invest in and understand what is truly happening on the ground, as well as meeting the senior management before making any investment decisions. This is something retail investors like yourself do not have the ability and the luxury of time to do so. Active fund management also have an important role to play in emerging markets where information about individual company prospects is not easily available.


Despite the easy market access to different types of investments, investors should be aware of their financial situation and make investment decisions based on their risk appetite. At dollarDEX, we help you make the most out of your investments by not charging any fees! All you have to do is to pay the fund managers for their expertise which will already be reflected in your fund's daily Net Asset Value (NAV). Start your investment journey to make the most out of your money today!


Still not convinced why you should be getting "active"? Check out Allianz Global Investor's article here to find out how active managers outperformed their passive peers during recent major market downturns.



All information here is for GENERAL INFORMATION only and does not take into account the specific investment objectives, financial situation or needs of any specific person or groups of persons. Prospective investors are advised to read a fund prospectus carefully before applying for any shares/units in unit trusts. The value of the units and the income from them may fall as well as rise. Unit trusts are subject to investment risks, including the possible loss of the principal amount invested. Investors investing in funds denominated in non-local currencies should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Past performance is not indicative of future performance. dollarDEX is affiliated with Aviva but dollarDEX does not receive any preferential rates for Aviva products as a result of this relationship. Unit trusts are not bank deposits nor are they guaranteed or insured by dollarDEX. Some unit trusts may not be offered to citizens of certain countries such as United States. Information obtained from third party sources have not been verified and we do not represent or warrant its accuracy, correctness or completeness. We bear no responsibility or liability for any error, omission or inaccuracy or for any loss or damage suffered by you or a third party (including indirect, consequential or incidental damages) arising in any way from relying on this information.

This information does not constitute an offer or solicitation of an offer to buy or sell any shares/units.

Information is correct as of 17/07/2018.


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*dollarDEX investment portfolios are administered by Navigator Investment Services Ltd.

Disclaimer
All information here is for GENERAL INFORMATION only and does not take into account the specific investment objectives, financial situation or needs of any specific person or groups of persons. Prospective investors are advised to read a fund prospectus carefully or may wish to seek advice from a financial adviser before applying for any shares/units in unit trusts or making a decision to purchase an investment product. The value of the units and the income from them may fall as well as rise. Unit trusts are subject to investment risks, including the possible loss of the principal amount invested. Investors investing in funds denominated in non-local currencies should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Past performance is not indicative of future performance. dollarDEX is affiliated with Singlife but dollarDEX does not receive any preferential rates for Singlife products as a result of this relationship. Unit trusts are not bank deposits nor are they guaranteed or insured by dollarDEX. Some unit trusts may not be offered to citizens of certain countries such as the United States. Information obtained from third party sources have not been verified and we do not represent or warrant its accuracy, correctness or completeness. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons.

All prices and values shown on dollarDEX.com are indicative and is based on prices that is from 2-4 dealing days ago. Fund prices are provided by a third-party and clients should not rely on these prices for decision making. dollarDEX does not guarantee any prices or valuations shown, and accepts no responsibility for their accuracy.

This information does not constitute an offer or solicitation of an offer to buy or sell any shares/units.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

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Navigator Investment Services Ltd is a subsidiary of Singapore Life Ltd.