Saturday, July 7, 2018

186) Does Fund Performance include Service Charge?

186) Does Unit Trust Fund Performance include Service Charge?



Fund Performance Graph as shown below:




Fund Performance Report as shown below:


Fund Performance information is showing the returns of a fund.


How to Differentiate the Charges?

Charges to a fund operation.

The charges to a fund operation affects all investors and all units at the same time. It does not reflect whether the investments are old or new. The unit prices are reflecting daily performance. The capital gain/loss, income received and expenses incurred by the fund are already accounted for.

These expenses are incurred daily by a fund and the total amount are shown in the annual report.

Below is the list of expenses:
a) Management Fees
b) Trustee's Fees
c) Audit fee
d) Tax Agent fee
e) Brokerage fees
f) Operation and Admin charges

The full details of charges and amount are shown in the fund annual report.


Charges to an investor's activities

The charges to an investor's activities are only incurred by that particular investor. If one investor do a lot of transactions, the cost incurred will be higher. These expenses are incurred by investors and reflected in their investment statements.

Below is the list of investor expenses:

a) Initial Service Charge
b) Switching Fees
c) Transfer fees
d) Exit Fee
e) Early Withdrawal fee
f) Redemption fee


Can Fund Performance measured by Unit Price changes?
Yes and No.

Yes.
Fund Performance are reflected by the unit price changes on daily basis.

No.
However, some changes will affect the unit prices, but not fund performance.
a) Distribution
b) Unit Split

As a guide, it is better to use the fund performance table, graph or reports to know the fund performance within a specific time frame.

It is better to view the Investor's Investment Statement to know the actual investment returns as experienced by the individuals.

The performance between the fund, and an investor's investment, can be different due to the many transactions made by the investor.  

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