Forum Archive Index - March 2001

["Andrew Dengel" <adengel@voyager.co.nz>]

Mike,

 

Good post! I believe you are correct in your assumptions, most of us mere mortals don’t have the capital/time or knowledge to invest directly into overseas markets, particularly some of the more obscure regions and sectors. Unit trusts can be a great way for a reasonably informed investor who is prepared to put some time into monitoring his/her investments to gain access to and perform well in these areas.

  Problem has been in the past that your average mum and dad is put into one of these trusts, usually with the whole lot in one managed account eg balanced and left there! They don’t know/don’t care (until cash up time!!) what it is and the salesman doesn’t monitor or advise them about it once its up and running! I know this because I was in the industry and sold them myself and whilst I am not tarring all with the same brush that is generally what happens.

However as I mentioned before, if you are prepared to put a bit of time and effort into it you can do well. Sovereign for example don’t charge any fees for fund switching and have quite a range of specific region funds etc, last year the Far East fund hit over a 100% return (first NZ trust to do so I believe) this year its running at –40%! But it shows if you are prepared to monitor and move your funds around it can be a good way of gaining access to these markets.

As you are no doubt aware there are numerous companies and funds available, fees generally are pretty good nowadays, be aware that the approx 5% entry fee many charge is the planners/advisors commission, this is negotiable!! They don’t have to take it, now obviously they have to make a living but shop around and negotiate often you can get it down to 3 or 2 % or some will charge you a flat fee or time based charge instead.

 

Cheers

Andrew

 

-----Original Message-----
From: owner-sharechat@sharechat.co.nz [mailto:owner-sharechat@sharechat.co.nz]On Behalf Of mikejenny
Sent: Friday, 23 March 2001 21:10
To: sharechat@sharechat.co.nz
Subject: [sharechat] unit trusts

 

I've been reading and thinking about these trusts over the last while and weighing up the pros and cons of index and managed funds.

I have never invested in them and some Q's I'm left with are.

It seems a good way to get exposure to overseas markets for the majority of people and to diversify their portfolios but why even bother with aggressive funds and their extra fees if in the long term index funds seem to outperform or at least equal them! ?

Given that most fund managers allow you to move some or all of your $$ around their funds a couple of times a year without fees wouldn't one be better to concentrate on economies and regions in their broadest terms and move funds into ones that are performing well at the time and out if things look bad?

Given all the best intentions in the world most of us without having access to a constant supply of info about companies on the other sides of the world will find it very difficult to make as informed decisions as we might with those close to home in Aust and NZ, isn't using the fund managers ready researched choices is time and cost effective?

Do you get a list of the co's invested in by your manager or in the case of an index fund if it just assumed you will know or don't care?!

 

any thoughts

cheers iccon

 

still spewing about not trading commsoft (198c) for carters (170c) in November like my mind was telling me to. oh well my one little tech wreck I guess!