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How to Research & Choose Managed Funds
© 2012 Michael Lannon
When it comes to investing in managed funds and superannuation, many investors are uncertain of how to go about researching and comparing the available products. Many seek the assistance of a financial planner but are then charged high entry fees and commissions. The following article is intended to educate readers on how to interpret the available independent research and ratings, as well as provide information on other considerations when comparing funds.
There are literally thousands of managed funds and superannuation funds available in Australia. The vast majority of these funds are owned by banks and insurance companies which in turn own financial planning companies that recommend their corporate owner’s “in-house” products, making the advice one receives potentially subjected to bias. Investors can find factual information combined with promotional information on the company’s managed funds in advertisements and on company websites but the key questions remains:
How is an investor supposed to sort through the range of products and get unbiased assessments of their relative investment merit? Where can an investor find this information?
Luckily there are a couple of independent fund research companies that research managed funds and assign ratings. Research on Australian managed funds is provided by Morningstar and Standard & Poor’s, both of whom provide ratings on thousands of funds. By using independent ratings, individual investors are able to harness the resources and expertise of these two research houses in developing their own investment portfolio.
In the past financial planning firms paid for access to this information and in turn passed the information onto investors. Nowadays investors can directly access this information via websites that target DIY investors, as well as in the “money” or “investment” sections of main newspapers. Investors are able to access comprehensive
© 2012 Michael Lannon
When it comes to investing in managed funds and superannuation, many investors are uncertain of how to go about researching and comparing the available products. Many seek the assistance of a financial planner but are then charged high entry fees and commissions. The following article is intended to educate readers on how to interpret the available independent research and ratings, as well as provide information on other considerations when comparing funds.
There are literally thousands of managed funds and superannuation funds available in Australia. The vast majority of these funds are owned by banks and insurance companies which in turn own financial planning companies that recommend their corporate owner’s “in-house” products, making the advice one receives potentially subjected to bias. Investors can find factual information combined with promotional information on the company’s managed funds in advertisements and on company websites but the key questions remains:
How is an investor supposed to sort through the range of products and get unbiased assessments of their relative investment merit? Where can an investor find this information?
Luckily there are a couple of independent fund research companies that research managed funds and assign ratings. Research on Australian managed funds is provided by Morningstar and Standard & Poor’s, both of whom provide ratings on thousands of funds. By using independent ratings, individual investors are able to harness the resources and expertise of these two research houses in developing their own investment portfolio.
In the past financial planning firms paid for access to this information and in turn passed the information onto investors. Nowadays investors can directly access this information via websites that target DIY investors, as well as in the “money” or “investment” sections of main newspapers. Investors are able to access comprehensive