It’s the final week of our Introduction to Investing ‘course’ and, while I think many were hoping it would also be the end of lockdown, it’s clear that for many working from home is here to stay a little while longer. So, as I don’t have kids I’m trying to homeschool, I’m already browsing new courses to try. But before that, let’s jump straight into the final chapter of this particular story!
‘A simple fact that is hard to learn is that the time to save money is when you have some.’ — Joe Moore, TV personality
Where to start your research
In this course so far, we’ve covered a variety of topics to help get you started on your research journey. Week one explained the difference between an investment fund and investment trust. Week two covered active vs passive, fees, risk and share classes. In week three we did a deep dive into growth or income and determining your investment goals. And last week, we touched on growth and value as investment styles.
That’s still quite a lot of information to take in and, despite all our new found knowledge, picking an investment fund from the 3,000 plus that are available may still be a daunting task. Simply put, that’s why FundCalibre exists: we narrow down the choices and focus on consistent performers. You can take comfort in the knowledge that our investment research team has analysed each fund and trust in depth before assigning them a rating.
Unsure about how our rating system works? You can read more about it here.
Getting the most use out of FundCalibre
FundCalibre can be an excellent tool to help you pick a fund and even construct your very own investment portfolio. Let’s take a look at all the options and features offered…
Each Elite Rated fund or trust (and those on our Radar) have a fund note. On each note you will find information that can help you decide if this fund is for you.
Generally speaking, there are four ‘main’ things to look for when comparing funds:
- Don’t just look at past performance.
Yes, a long-term track record of strong returns can be a good sign, but there is never any guarantee a fund will continue to do well in the future. We show a fund’s performance for at least the last three years. You’ll be able to see how the fund has performed against its benchmark for reference.
Remember, it may be a fund that performs particularly well in one type of market, but not others. This is where your knowledge and understanding of growth vs value style could be useful. When looking at Elite Rated funds you’ll see references to style throughout our research.
- Research the fund manager.
How long have they been running the fund? Do they have experience managing money in different market conditions? What support or resources (e.g. in-house research teams) does the manager have? You can learn more about the fund managers and their experience in their bio, but if you’re still unsure, our ‘key facts’ display the manager’s start date on that particular fund.
- Check the costs and the returns after costs.
The cost of a fund can impact on its total returns so it’s an important consideration. You should check both the AMC and OCF (both of which are displayed in our key facts). Never choose a fund purely because it has the lowest charges. Returns after costs are arguably much more important. It’s better to pay a little more for a fund that should perform better over the long term, rather than pay less for a fund that under-performs. You should also be cautious of transitional and platform fees, these differ from platform to platform, so do your research before choosing what’s best for you.
- Understand the fund’s risk score.
Every fund and trust rated by FundCalibre includes a risk score from 1 to 10 (10 being the highest risk) to help guide you. This doesn’t mean the manager is a gambler, it simply means the asset class in which the fund sits is riskier.
Ideas and Insights
Our regular blog articles cover a wide variety of topics: different asset classes, geographies, even different themes to inspire you. Curious about how lockdown will change investing? You might consider our look at the four trends that will continue post lockdown. For example, working remotely could influence a number of technology companies.