Managed Funds with the lowest fees

MARISSA HAYDEN
Content Producer · 29 June 2021
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.

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.

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 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 Product Fund Type Management Fee 3 Year Performance
Equity Trustees Limited Ventura Growth 70 – Class A Multisector Growth 0.00% 7.27%
Equity Trustees Limited Ventura Diversified 50 Fund – Class A Multisector Balanced 0.00% 6.46%
Equity Trustees Limited Ventura Conservative Fund – Class A Multisector Moderate 0.00% 5.12%
Equity Trustees Limited Allan Gray Australia Equity Fund – Class B Equity Australia Large Value 0.00% 5.04%
OnePath OA Frontier IP – ANZ Cash Advantage Australian Cash 0.00% 1.04%
Colonial First State Investments FirstChoice WS Inv – FirstRate WS Saver Australian Cash 0.00% 0.81%
UBS Asset Management UBS Cash Fund Australian Cash 0.10% 0.96%
StateStreet Global Advis State Street Australian Cash Trust Australian Cash 0.10% 0.11%
Advance Asset Management Advance Cash Multi-Blend Fund Australian Cash 0.12% 1.18%
Pendal Fund Services Limited Pendal Managed Cash Fund Australian Cash 0.12% 1.03%
Specialised Private Capital Fixed Income Strategy 2 (FIS2) Bonds – Global / Australia 0.15% 2.28%
StateStreet Global Advis State Street Australian Equities Index Trust Equity Australia Large Blend 0.16% 9.84%
Vanguard Investments Vanguard Index Australian Shares Fund Equity Australia Large Blend 0.16% 9.54%
StateStreet Global Advis State Street Australian Listed Property Index Trust Equity Australia Real Estate 0.16% 6.46%
StateStreet Global Advis State Street Australian Fixed Income Index Trust Bonds – Australia 0.16% 4.00%
StateStreet Global Advis State Street International Equities Index Trust Equity World Large Blend 0.18% 13.98%
Vanguard Investments Vanguard Index International Shares Fund Equity World Large Blend 0.18% 13.32%
Perpetual Investment JPMorgan Global Research Enhanced Index Equity Fund (Hedged) Equity World – Currency Hedged 0.20% 13.38%
StateStreet Global Advis State Street Global Fixed Income Index Trust Bonds – Global 0.20% 3.61%
Vanguard Investments Vanguard Index Hedged International Shares Fund Equity World – Currency Hedged 0.21% 12.31%
Source: www.canstar.com.au – 15/06/2021. Top 20 managed funds selected based on annual management fee. Total fees representative of management fee and all other associated annual fees for a net asset value of $50,000. Table sorted in ascending order based on management fee, then descending order based on 3 year fund performance.

Alternatives to managed funds

If managed funds are not for you there are other alternatives. Exchange traded funds or 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.

Cover image by: Natee K Jindakum/Shutterstock.com


Compare Online Share Trading Accounts with Canstar

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Marissa is the Content Producer for the Wealth team at Canstar, and specialises in investment content. Her previous experience has seen her create content for wide range of industries from travel to the legal sector. Follow Marissa on LinkedIn, and Canstar Investor Hub on Facebook.