Managed Funds Geared Managed Funds?

Discussion in 'Shares & Funds' started by Lam Thieu, 13th Sep, 2007.

Join Australia's most dynamic and respected property investment community
  1. Lam Thieu

    Lam Thieu Well-Known Member

    Joined:
    24th Jan, 2017
    Posts:
    205
    Location:
    Melbourne, Australia
    What do people think of Geared Managed funds....they are among the top performing funds....

    ...however there MERs is also among the top of any managed fund.

    Is there any advantage in investing in these funds? Anyone u recommend?

    ? Perpetual WFI Perpetual's Geared Australian
    ? Skandia GIS - Blended Australian Geared Shares Fd
    ? CFS FC Inv - CFS Geared Share
    ? CFS MIF - Geared Share Fund

    Thanks.
     
  2. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,393
    Location:
    Sydney
    Geared funds are generally more volatile than other funds - so if you are borrowing to invest, or if you can't stand to see your investment drop by 36% when the market only drops 9% (as in the case of the CFS W/S Geared Share fund in the recent correction) ... then you need to be cautious about how you approach these funds.

    However, if you can live with the volatility, these funds will generally give you better overall results over a longer period of time. Even with a -20% year, the +40% years (or better) will easily see you out in front over a 5+ year period.

    Just don't forget that this strong market can't last forever - the recent extreme returns from geared share funds may not continue as market volatility increases.
     
  3. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,075
    Location:
    Sydney, NSW
    Hi AAS,

    Funds are more expensive generally because they are more active, eg, look at the MER of a Cash Fund vs an International Share fund.

    If your looking at geared funds, they are expensive. In theory, you wil get better returns, with bigger roller coaster rides up and down!.

    Enjoy the ride!

    Cheers,

    Dan

    The above is not a recommendation to invest in managed funds. Speak to a FPA registered financial planner, accountant or tax adviser before making an investment decision.