The Fund Manager Fee Discussion Continues...

When considering the cost of including Managed Investment Schemes in our portfolios - "value" should be our yard stick, not price alone.

We build investment strategies using combinations of direct and managed investments. Of the so-called Managed Investments, some can be listed or unlisted, active or passive. Size, scale and "smarts" (the degree of the active involvement), will make a difference to the underlying price.

Returns should always be measured net of costs! If a manager can demonstrate consistent outperformance after fees or, if they can reduce the degree of risk in the portfolio mix (this value-add is not always apparent), then we may be attracted to include them as a part of our portfolio construction process (the devil is in the detail).

Building a portfolio of direct stocks (to gain sufficient diversification) is a time-consuming exercise and then there is a cost to monitor and administer. This is why as a practice we combine active, passive, managed, listed and unlisted Managed Funds, as well as many direct investments in individual companies. We want to achieve the best risk-adjusted net outcome. With that goal firmly in our sights, we’ll also have an eye on tax implications, costs & risks.

Be it via the tortoise or hare, we seek to engage the best solutions to achieve our client’s lifestyle and financial goals and we’ll be more concerned about achieving the best value, rather than the lowest cost.

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