Monday, March 13, 2006

Internet portal reduce front end charges

The Straits Times reported that two internet portals have reduced their front end charges for investing in unit trusts. The charges have been reduced to 1% and 2.5% respectively.

The unit trusts sold by these portals have high annual charges, typically from 1.5% to 2.5% per annum.

These high annual charges can reduce your return over a 10 year period.

By comparison, the combined fund from NTUC Income has modest charges, as follows:

- initial spread: 1.5% to 3.5%, depending on amount invested
- annual charge: about 1% per annum.

By investing with NTUC Income, you can get a return of about 3% to 12% more over 10 years, assuming that the performance of the fund is similar. This better return comes mainly from our lower annual charge.

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