Email of the day
Comment of the Day

November 09 2012

Commentary by Eoin Treacy

Email of the day

on high fund charges:
“Eoin mentioned a fund which had the following charges "has a management fee of 1.41%, performance fee of 20% and a back load of 3%" That's a pricey animal and I would normally not touch something like that on principle. I appreciate it was not a recommendation but, and here's the Question, are there many funds which still charge at that sort of level? And subsidiary question, are there substantially higher costs monitoring the Chinese market?

Eoin Treacy's view Thank you for this question which others may also have an interest in. As veteran subscribers will be aware Fullermoney takes a dim view of high fees particularly when they are charged on markets where there are a large number of alternatives. In such cases one really does have to weigh up what additional value is being provided for the additional cost.

With regard to China, the difficulty of investing directly in A-Shares has forced most investors interested in China to participate via Hong Kong listed shares. There are a number of funds that invest directly in China with considerably lower fees and it really is worth doing one's due diligence to contrast performance with charges. The Matthews Fund I also reviewed yesterday is an example of a relatively low cost offering with more than 50% of its assets in mainland China. Global-X has a number of China sector ETFs but does not have a healthcare fund. I believe healthcare is a major component of China's consumer growth story. If subscribers know of a China healthcare fund with lower charges than the Atlantis offering and similar or better performance I would be happy to add it to the Chart Library.

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