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Information vital to help new investor select the correct fundEVERY week, we profile an individual fund on the front page of BT Money. The aim is to give readers, who may be potential investors, an insight into what the fund is all about. The following explains the relevance of some of the fund information provided:
Objective It is important an investor knows and understands the stated objective of a fund, as this tells you what a fund is trying to achieve, and how it will attempt to do this. If a fund says it will invest in equities for capital growth, and the investor is looking for a low-risk investment to generate a regular income, then the fund is obviously not suited to that investor.
Target market The target market profiles the type of investor who the fund manager feels is suited to the fund.
Charges Investors should know the fee structure of a fund so that they can see what portion of their investment will actually be invested.
Minimum investment Most funds have minimum investment amounts for a lump-sum investment and a recurring monthly savings plan.
Past performance These figures are provided by Micropal. Although past performance is in no way a guide to future performance, it can tell you how funds have fared in comparison with their peers.
Past two income distributions It is important to know how much income a fund expects to yield, especially if regular income is your main concern. There is, however, no guarantee that the fund will yield the same figure in future. Remember, dividends are tax free, while interest is not (after the first R2 000) - which is why we provide the percentage breakdown.
About the fund manager
The human factor plays a significant role in a fund's performance. The manager's personal details are important as they give investors an indication of how experienced he or she is. If a fund has recently changed hands, watch the fund carefully because the new manager could introduce significant changes to the fund's portfolio which could have an effect on the fund's performance.
Investment Attitude Here the fund manager explains his approach in investing the fund's assets. Fund managers have different theories as to what to invest in and how to achieve the best results.
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