How fund charges can impact your investments

5 min Read Published: 20 Oct 2014

If you are a private investor the primary concern is the performance of your investments, that is why all the figures quoted on 80-20 Investor are net of charges. Yet the performance of your investments can be impacted significantly by the charges levied by fund managers on an ongoing and ever increasing basis.

The headline performance of your investments will mean very little if you are paying a sizeable chunk to a company for simply managing these investments on your behalf. So what are these charges and how do you make sure they are reasonable and competitive?

When you buy unit trusts and OEICs there are two main charges levied, an initial fee and an annual fee.

Initial fee

This is a fee levied when you first invest in a fund. If you are investing in an OEIC (an open ended investment company) then this initial fee is levied as a percentage of your overall investment, typically around 5%.

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