This year, the money flowed into balanced funds, and overall, it’s also the most popular fund category second only to mutual funds to Swedish investors.
But there are big differences between the returns the funds manage to achieve, and a review that Morningstar has done shows that there is a link between performance and fund age.
– I was surprised that it was such a big difference, says chief analyst Jonas Lindmark, which looked at how the fund performed over the past three years.
The elderly have increasingly high scores, the younger are more likely to lower the rating. One explanation is differences in fees, which on average is lower in the older funds.
And then do not include the Jonas Lindmark calls “Gridiron Gang” who has started the past two years, and who may have charges on over three percent. They are too new to be included in the grading system.
Balanced Funds are convenient, because you automatically get a mix of stocks that involves more risk and fixed income securities that have a lower risk. But while the fees may be higher than for pure equity funds, eroding savers’ returns.
So how should we think like Savers? Think first through the type of fund you need, advises Jonas Lindmark. If you land in that it is a balanced fund, it is then time to compare funds within that category.
– Try to find an alternative with low costs. One should perhaps not opt out of a fund just because it is new, but they should ideally have five years of history that you should see how the manager performs, says Jonas Lindmark.
If you choose a brand new fund will The offer something special that does not exist in older funds, he believes.
– Otherwise, it’s better with an experienced manager who is successful in this type of fund.
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