Managed Funds with the lowest management fee
Whether you invest in stocks, bonds or managed funds you will encounter fees. It’s an unavoidable aspect of investing, but the fees can vary drastically from one product to another. We looked at managed funds on Canstar’s database to find the funds with the lowest fees.
What are managed funds?
A managed fund involves pooling together money from different investors into one fund that is invested and overseen by a professional investment manager. With a managed fund you can invest in a single asset class such as shares, bonds and cash, or a multi-sector option such as a Growth or Balanced fund, which contain a mix of different asset classes.
When you invest in a managed fund, you are allocated a number of ‘units’. The value of each unit is referred to as the unit price, which is calculated on a daily basis reflecting the value of the fund. If the value of the fund increases, the unit price will rise. Conversely, if the value of the fund decreases the unit price will decline.
Related article: Best Return on Investments – Shares, Bonds, Cash or Property?
How can you access managed funds?
Managed funds can be either ‘listed’ and tradeable on the share market, or ‘unlisted’ and bought and sold directly through a fund manager. If the fund is ‘listed’, the value of the shares is dictated by supply and demand, which is in turn dictated by performance and valuation. This is the same as other listed shares.
If the fund is ‘unlisted’, new units in managed funds that are still open for investment are issued in line with demand, with a product disclosure statement (PDS). Unlisted funds are valued at least weekly by the fund manager, who divides the net value of the assets on the day by the number of issued units.
Provider | Fee for $15K trade* | Ongoing fees# | Trade with live prices^ | |
---|---|---|---|---|
$15.00 | Yes | Yes | ||
$7.50 | Yes | Yes | ||
$14.98 | Yes | Yes |
View all Canstar rated Online Share Trading products. View Disclosures.
* Online brokerage fee for a $15,000 trade based on the number of transactions specified in the search inputs
# Ongoing fee for the account. There may be waivers and discounts subject to account use
^ The ability to view and trade on live prices
What are the fees involved in managed funds?
There are a number of fees involved with managed funds including:
- Management fee, also called the management expense ratio (MER)
- Administration fee
- Investor/low balance fee
- Performance fee
These ongoing fees can eat into your returns. So, when deciding on which managed fund to invest in, you may want to take into consideration all the fees involved.
To learn more about the managed funds and their fees, check out this article.
Top 20 Managed Funds with the lowest management fee
Provider | Fund | Management Fee | Average Annual Return | ||
1 Year | 3 Year | 5 Year | |||
Equity Trustees | Allan Gray Australia Equity Fund – Class B | 0.00% | 22.60% | 10.75% | 9.76% |
OnePath | OneAnswer Frontier Investment Portfolio – ANZ Cash Advantage | 0.00% | 0.45% | 0.73% | 1.06% |
StateStreet Global Advisors | Australian Cash Trust | 0.10% | 0.01% | 0.06% | 0.11% |
BT | Cash Management | 0.11% | 0.07% | 0.22% | 0.52% |
Advance Asset Management | Cash Multi-Blend Fund | 0.12% | 0.07% | 0.58% | 1.20% |
StateStreet Global Advisors | Australian Equities Index Trust | 0.16% | 14.87% | 10.50% | 9.08% |
StateStreet Global Advisors | Australian Listed Property Index Trust | 0.16% | 17.53% | 5.04% | 7.74% |
StateStreet Global Advisors | Australian Fixed Income Index Trust | 0.16% | -5.76% | -0.49% | 1.71% |
StateStreet Global Advisors | International Equities Index Trust | 0.18% | 11.73% | 13.09% | 13.04% |
StateStreet Global Advisors | International Equities Index (Hedged) Trust | 0.20% | 10.97% | 13.60% | 11.61% |
StateStreet Global Advisors | Global Fixed Income Index Trust | 0.20% | -4.21% | 0.60% | 1.78% |
Australian Ethical | Australian Ethical Income Fund | 0.20% | -0.10% | 0.55% | 0.96% |
Vanguard | Index Australian Property Securities Fund | 0.23% | 18.84% | 5.47% | 7.77% |
StateStreet Global Advisors | Climate ESG International Equity Fund | 0.24% | 10.72% | 13.57% | 12.87% |
Equity Trustees | Allan Gray Australia Stable Fund | 0.25% | 6.65% | 4.99% | 4.73% |
Pendal | Short Term Income Securities Fund | 0.25% | 0.09% | 1.19% | 1.76% |
Janus Henderson | Conservative Fixed Interest Fund | 0.25% | -0.35% | 1.04% | 1.50% |
Mutual Limited | Cash Term Deposits and Bank Bills Fund | 0.25% | 0.10% | 0.75% | 1.33% |
StateStreet Global Advisors | Passive Balanced Trust | 0.26% | 8.39% | 7.68% | 7.84% |
Schroders | Sustainable Global Core Fund Wholesale Class | 0.30% | 11.43% | 10.98% | 10.84% |
OnePath | OneAnswer Frontier Investment Portfolio – OnePath Australian Shares Index | 0.30% | 14.56% | 10.24% | 8.69% |
Yarra Capital Management | Australian Bond Fund | 0.30% | -5.79% | -0.24% | 1.92% |
Source: www.canstar.com.au – 15/07/2022. Based on managed funds on Canstar’s database. Top 22 selected and table sorted in ascending order based on management fee, followed by descending order by 5 year annual return. Average annual returns provided by Morningstar and are effective to the end of March 2022. Past performance is not a reliable indicator of future performance. Before committing to a particular fund, check upfront with your provider or financial advisor and read the PDS to confirm whether it suits your needs. |
Alternatives to managed funds
If managed funds are not for you there are other alternatives. Exchange traded funds (ETFs) are similar to managed funds. Both are pooled investment vehicles that have a fund manager to oversee the investment. And, with both you can also gain exposure to a wide variety of investment options.
However, the key difference between the two is that ETFs are traded on the stock market whereas this is not the case with most managed funds. Due to this, most ETF investors have a greater transparent view of their fund’s holdings and investment value, than manage fund investors.
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This article was reviewed by our Content Producer Isabella Shoard before it was updated, as part of our fact-checking process.
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