KEEP THIS IN MIND WHEN YOU CHOOSE A MONEY MAR­KET FUND:

Finweek English Edition - - MONEY -

QUAL­ITY OF MAN­AGE­MENT TEAM

It’s im­por­tant to know how long an as­set man­age­ment team has worked with the com­pany, as is their level of ex­pe­ri­ence. In­vestors need to be aware that not all money mar­ket funds are the same. Some could be i nvested in gov­ern­ment a n d cor­po­rate i nstru­ments as well to fur­ther di­ver­sif y ri sk, how­ever, bank in­stru­ments carry the low­est risk. CHECK UP­FRONT FEES

Com­pare f e e s . Al l a s s e t man­age­ment funds charge a fee, but th­ese vary.

Some a s s et man­age­ment com­pa­nies charge an up­front (or ini­tial) fee. This means that if you in­vest R100, they may charge their up­front fee of say 0.4% (or more), which means you have a lower i ni­tial cap­i­tal i nvest­ment (of R99.60) than you planned for. Weigh up fees and charges to help de­cide which op­tion is best for you. CHECK THE CREDIT QUAL­ITY

In­vestors need to be com­fort­able with the un­der­ly­ing as­sets that they are in­vest­ing in. Fund fact sheets give a break­down of top 10 hold­ings in funds, the re­turn and the risk pro­file, and th­ese are pub­lished on a monthly ba­sis on the as­set manager’s web­site. This is an­other ad­van­tage over money mar­ket ac­counts be­cause a bank does not have to tell you where your money is i nvested. With money mar­ket funds you have full trans­parency.

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