After the costs, here are some tips on what to look out for if you want to try a savings plan on funds:
Low front-end load

The highest regular fee for a fund savings plan is the front-end load. At an average of around 2% - 5% of the savings rate, it is important that this is kept particularly low. Most custody account providers offer a discount - and without a bonus campaign. How does this work? The providers usually receive a portfolio commission. In this way, the custody account providers can refinance themselves with low issue surcharges.

Completely free so-called no-load funds are tempting, but often involve high management fees. No-load funds are recommended for short savings periods or quick fund changes.

    Keep in mind that strategy and the quality of the fund should always come before a discount!

Consider hidden running costs

Even if the TER or the information on ongoing costs are helpful in an initial overview, neither of these are reliable parameters of the total costs, but only initial selection criteria. Therefore, first compare funds according to the given key figures such as the TER.

Once you have made an initial selection, look at the exact costs in the product description.
Look at the benchmark index

Many funds use an index as a benchmark. The aim is to generate a higher return than the index. Only if the fund has reliably beaten its market in the past and it is foreseeable that it will do so again is a fund better than an trading at exness broker singapore. If the fund generates a lower return than the benchmark index, the investment is not worthwhile.

Similarly, the ongoing costs and front-end load must be set in relation to the return. If the fund's annual return is only just above that of a comparable ETF, the fund's additional costs can have a negative impact on the actual return and ultimately lead to poorer performance.

Fund savings plan advantage

    Cost-average effect
    Compound interest effect
    High expected returns due to the fund manager's expertise
    Depending on the fund, high diversification

The clear advantages of a fund savings plan lie in the active management by a manager. This makes it possible to achieve high profits that outperform the market. This can lead to high profits being achieved over a short to medium-term investment period that are higher than the best ETF for a savings plan.

There are also funds that focus specifically on a dividend strategy. If you want to earn a regular income from your investment, then a fund might suit you.
Fund savings plan disadvantage

    High issue surcharges reduce the return
    Returns depend on other fund costs
    only a few funds permanently beat a comparable ETF

Active management sets a whole cost machine rolling: Not only analysts and managers have to be paid, but also advertising, administration and transaction fees.

Despite highly trained fund managers, only 2.2% of actively managed global equity funds managed to beat the benchmark S&P Global 1200 over a 10-year period, according to a 2015 SPIVA study. Finding just such a fund is like looking for a needle in a haystack. For this reason, maturities of a few years are preferable for funds.

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