Managed Funds Hidden Fees22 July 2011, 5:36 AM |
Have a read of this from a Colonial First State PDS and let me know if you can make head or tail of it. The PDS lists two figures for their funds: Management Fees (1.4%) and Management Costs (1.5%).
The terms ‘management costs’ and ‘management fees’ mean different things.
Management costs include management fees, estimated performance fees (if applicable), investment expenses and custody fees. Management costs are deducted from the performance of the fund (ie they are not charged directly to your account). They do not include contribution fees, transaction costs or additional service fees. The management costs for each fund are either an estimate or based on current financial information. They are expressed as a percentage of each fund’s net assets and, together with any applicable transaction costs, are outlined in the table above.
Management fees are the fees payable under the Constitution for the management of each fund. Management fees are calculated from gross assets of the fund. For details of the maximum management fees allowed under the Constitution, see table above.
They also slap you with Contributions Fees (4%), Advisor Fees (4.29% + 0.66% pa) and Transaction Fees (0.1%).
I seriously need to get into the business of talking crap.