Fund Tools

Petko Bahovski

In this last chapter we look at some tools that should be helpful to you during the initial fund-selection process as well as addressing some points that you should keep in mind in the long run.

First we point out some important aspects that you have to consider when you go through the fund-selection process. Those include: your long-term personal and financial goals; how and where to compare investment funds; actively versus passively managed funds; distributing versus reinvesting; share classes; open-end versus closed-end funds; funds of funds (also referred to multi-management or multi-manager strategies); taxes; and lending against investment funds.

Next we address the topic of fees. In today’s world, it is almost impossible to invest without paying some form of fee. Besides the fees that you pay to the fund (in the form of expenses) you are most probably charged commissions and fees for buying, holding and selling the fund. The fees can take away a substantial part of your returns, thus understanding and optimising them can save you a lot of money in the long run.

Then we look at where your financial portfolio stands as part of your overall wealth. We will see how

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