Saturday, August 19, 2006

Do all investment funds charge similar annual fee?

Do all investment funds charge similar annual fee?

Most funds in the market charge an annual fee of 1.5% to 2%. The Combined Growth Fund from NTUC Income charge a lower fee of about 1%.

Assume you invest $50,000 for 20 years and the fund earns 6% per annum. The difference of 1% in annual fee gives $26,000 more on maturity. You get more by investing in our fund, due to its lower annual fee.

NTUC Income has recently lowered its annual fee for several of its funds, including the Combined Funds and the Singapore Equity fund. So, the difference is higher than quoted above.

Our funds continue to perform better than similar funds in the market.
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3 comments:

Justin Lim said...

Got this information LIA/IMAS Fund Information Service. The report is for the period ending 31 March 2006. All the fund listed are similar in investment nature and thus being compared. The % shown is based on absolute returns. Looking at the figures, I would be better invested with John Hancock as it topped the table for alll 3 periods (past quarter, past 1 year and past 3 years).

So, how do we choose funds? By the charges or by their performance....? Cheap = Good?.... Not necessary true!

PAST QUARTER
10 AIA Portfolio 70: 1.28%
09 AXA Inspire-Seeker: 1.85
08 HSBC Diversified Growth: 3.31
07 NTUC Income Growth Fund: 3.48%
06 John Hancock Adventurous: 3.61%
05 Greatlink Lifestyle: 4.10%
04 OAC Retirewise: 4.45
03 Manulife Lifestyle: 5.28
02 UOBLife FOF: 6.18
01 John Hancock Pacific Harvest: 6.43%

PAST 1 YEAR
10 HSBC Diversified Growth: 9.14%
09 AIA Portfolio 70: 10.68%
08 NTUC Income Growth Fund: 13.48%
07 AXA Inspire-Seeker: 14.73%
06 John Hancock Adventurous: 17.05%
05 Greatlink Lifestyle: 15.06%
04 UOBLife FOF: 15.50
03 OAC Retirewise: 19.18
02 Manulife Lifestyle: 18.81%
01 John Hancock Pacific Harvest: 26.00%

PAST 3 YEARS
09 AIA Portfolio 70: 40.20%
08 AXA Inspire-Seeker: 47.80%
07 John Hancock Adventurous: 50.55%
06 HSBC Diversified Growth: 52.82%%
05 OAC Retirewise: 59.08%
04 NTUC Income Growth Fund: 59.63%
03 UOBLife FOF: 60.82
02 Greatlink Lifestyle: 63.60%
01 John Hancock Pacific Harvest: 75.46%
00 Manulife Lifestyle: N.A.

LINK:
http://www.fundsingapore.com/SL/xml/dsp_search_quick.xml

August 20, 2006 12:49 AM
Tan Kin Lian said...

Justin Lim compared the performance of mixed funds (ie funds invested partly in equity and bonds).

During the past three years, equities performed better than bonds.

Hence, a mixed fund that has a higher percentage of equities will perform better than another fund that has a higher percentage of bonuds. The difference is due to asset allocation.

A small fund has higher volatility. If it does well, it will outperform a larger fund. If it does poorly, it will under-perform a larger fund. The difference can be quite large.

It is better to invest in a large, well diversified fund and get a return that is closer to the market average.

Past performance is not an indication of future performance.

A low cost fund will give a better return in the long run.

August 20, 2006 3:09 PM
Justin Lim said...

Just to clarify: Justin Lim DID NOT compare the funds, they were compared and complied by IMAS. Go to IMAS website following this link: http://www.fundsingapore.com and click on "Performance Overview ILP".

The funds are being compared because they are of similar type of funds with similar investment objectives.

On Risk and Returns:
It is precisely what I have said in previous posts and am going to repeat it again:
RISK = RETURNS
If you are expecting that a "safe" investment will give you the extraordinary returns, you will be disappointed.

On Past Performances: I TOTALLY agree that it is NOT an indication on the future performace. Therefore DO NOT take sales talk like this seriously......."During the past 4 weeks, the investment funds managed by (Company XXX)have earned a return of between 2% to 5%. The highest increase is for the (ABC Fund)".

August 23, 2006 11:37 AM

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