No matter you are a private investor or an institutional investor, you are likely to see the term multi manager fund very often. The term has incorporated in its name the characteristics of this kind of investment vehicle. This feature might not be shared by other investment vehicles.

The term may be used in many specific investments under the name of collective investment. That is to say, this kind of investment takes in collective funds. Money is pooled together to buy underlying securities. Some multi-manager funds might be disguised in the form of other types of investment vehicles. Investment companies who are subject to volatility in the share market like Open Ended Investment Companies and those who only have a limited sum of shares open to the fluctuation in the market like Investment Trusts.
Multi-manager funds, when interpret literally, means that the investment must be run by several different managers at the same time. The major advantage of this type of investment vehicle is that the risks are spread across different managers through diversification for different people may be good at operating on different assets.
Risks can be lowered thought two major means. That is the two structures to be used in multi-manager funds. One is FOF, short for Fund of Funds; another is MOM, that is Manager of Managers.
FOF
The most prominent feature of the FOF is that instead of being invested directly into underlying securities, they are put into a single fund at first and then the money will be spread over several underlying funds. The manager of Fund of Funds will be in charge of the access and management of t FOF underlying funds.The credentials of every underlying fund are evaluated on the basis of its previous performance, asset classes, risks involved, and most important of all, the performance of the funds’ managers. The portfolio will be constructed based on the factors mentioned above. Once the portfolio was set, the performance of the funds will be essentially up to the ability of those fund managers. FOF manager can chose to transfer the money into other funds if it is not performing well.
The risk profiles will also be the criterion for the reference of FOF managers who have to make decisions upon the portfolio to be constructed. They will decide upon whether to invest in a wide range of themed funds or simply plunge it to a single asset class by taking the fund objectives into account. The majority of FOFs are not restricted to in the choice of funds as long as they are available on the market while a few are fettered, for limits have been put on these funds to invest in the same investment company.
FOFs share the benefits of all multi manger funds, such as risk spreading and diversification. Besides, a private investor can put his money into the funds which are usually and exclusively reserved for organizations rather than an individual. This funds offer them more choices. Investors are exempted from the CGT that is Capital Gains Tax when transferring their money among underlying funds.
But the dual layer structure means that fees might be charged at both layers. So the FOFs involve more costs compared with other types of investment vehicles.
MOM
Unlike Fund of Funds which adopts the method of diversifying the funds across several managers, the Manager of Mangers fund is run by multiple fund mangers of a single fund. It is also called segregated mandate, in which every manager have some expertise in some specific asset class.
In principle, this method manages to spread risks by distributing the responsibilities among a number of fund managers. In addition it allows a general fund manager to introduce specialization in different asset classes in order to achieve the maximum income. Therefore, the funds though are under the management of multiple managers while controlled by a general manager who will also take other managers’ suggestion into account, yet this is not a secondary level. MOMs have the advantage of a low operational cost. The money transference from one asset class to anther would not incur costs as opposite to FOF which might incur costs when switch the money. But the funds can still have the discounted investment costs which are often reserved for organizations rather than individual investors because of the large sum of asset value. These costs would be passed on to the investors.
Varied investment options are offered under the category of Multi Manager Funds. And every fund has its own features and involves different risks. Make sure that you find the right people to consult with before plunging your money in the stocks or funds.

It is very difficult to find a good mutual fund among a sea of existing mutual funds nowadays. Great attention should be paid when you are making the decision on your investments. The following are the guidelines for you to search for the gems with better performance and little risk. There are some factors to be considered when you are selecting the mutual funds.
1. The first and foremost important thing to do is to find a good-performing manager. A top manager could tide through ups and downs and lead the company out of crisis. If you happened to find one, follow him with your investment. They are usually focused on the objective. The chances are that their stability and experience would matter a lot to the value of your funds.
2. The second factor to be taken into account is the participation of the management team itself. ?If it is a great mutual fund, they would put a lot of money in it as well. You can be moreassured with the funds in which the management team has confidence. More interest can be expected.

3. Make sure the structure is not loaded. A good mutual fund will be damaged with high commissions. Usually, the majority of the great funds will offer options that are not loaded. Consult your financial advisers, these options are available. These investments could maximize the value of your dollar. Your money will work for you in a more direct way without brokers.
4. Choose the funds with lower expense ratio. All management teams set out to reduce the expense of the funds. So the expense ratio would be a good criterion to tell the well-performing funds from the rest. The low costs reflect many other elements which might contribute to the success of the funds.
5. Look for funds with consistent returns especially the annual returns of the funds over a long period of time. Aconsistent performance could not be achieve in luck nor other occasional or unstable factors, but rather the necessary skills and efforts to keep their place in the top ten percent. They are the gems. Your money could be better handled by them.
6. Make sure the management team has a clear investment strategy.An investment strategy must be made for every fund. But that is where the difference lies. Some strategies are vague and disorganized while others are much more clear and practical. Better strategy would make sure that they would be more focused. These funds would outperform those funds that let nature takes its course.
7. Last but not the least, another important figure should be taken into account is the long term record. A strong record indicates that they have done a great job in the past. It proofs the competence of the management team who couldmanipulate the funds well both at good times and bad times and finally provided a relatively good result. Though a new fund may have much potential but I favor the funds with longer good-performing records.
To put it in a nutshell, you should get more knowledge to navigate in the labyrinth. A good path could improve your financialstrength and compensate your weaknesses. If you have done the research on the bad funds and good funds and really take time and efforts to find the good investment strategy, you can rest assured with the gems in the future. There are so many choices to make, just take time and make your first step towards creating a wealth.

Before you sink your money into a CTF account for your children,you should make the child trust fund comparison and some knowledge about its process and relevant legislation will benefit you enormously.

Child Trust Fund Comparison
It is not at all complicated. First and foremost, government will grant a voucher to the children who were born on or after 1st September 2002 and got Child Benefit. As a parent, you are ready to take more information into consideration and invest the fund wisely for the sake of their children. Then you often find yourself busy in choosing proper fund among tons of financial organizations. You can choose to invest our money in the manner of one-off payment or monthly payment. If you think the fund is sound enough, you can invest more by adding money to the account but not exceed  £1,200 annually.
Once your son or daughter reaches the age of 18, he or she will be paid back all the money in the fund. According to existing legislation, the sum of money in the CTF account is tax-free. But no money is allowed to be withdrawn any time before his or her 18th birthday.There are three major choices as a way to invest the money including savings accounts, shares accounts and stakeholder accounts. They mainly differ in the usage of the amount of money in the account. The money in the shares account is used to buy shares whose might fluctuate over a period of time, while that in the stakeholder account is also used to buy shares but the money will then be changed into cash form with interest for some years before the fund reaches its deadline. The savings account is the most stable as its name indicates yet not much gains will generate under the fixed interest.
New Legislation of Child Trust Fund
Recently, there are some changes made to the legislation on Child Trust Funds. It was announced by the government in May 2010 less payments will be given to such accounts and ended eventually. It means that any children who born between August and December in 2010 will be given less Government vouchers while those who bore before January in 2011 could apply for these accounts.In the past, the Government would give the first deposit in the CTF account when a child turns 7. But according to the new legislation, those children who reach the age of 7 on August 2010 have no additional deposit to be given. However, the new legislation still guarantees the children born before January 2011 the original benefits according to the past legislation even though they are not qualified for the vouchers granted by the Government. More money up to £1,200 per year can be added to the account before the child turning 18 and withdrawal can only be made after that.
It is a great opportunity to be taken for the parents with son or daughter born on the proper time. You will get additional payment from the Government if you take advantage of the Child Trust Fund.
As we mentioned, you can choose among the three types of account according to your needs and the amount of money you would like to invest in later (not more than £1,200 each year). The only requirement is that the money cannot be withdrawn before the child turns 18 years old.

There are tens of thousands of investment choices that you can invest in today. Two of the most common are mutual funds and exchange traded funds (ETF’s). Each of them offers some great benefits to the average investor and both are extremely flexible. So which of them is a better choice for your portfolio? You will see the advantages and disadvantage of each as you read on.

Brief Overview of Each Investment:

Mutual Funds: A mutual fund is an open-ended fund that continually accepts new money for investment. Your money and all other investors is pooled together and the fund managers purchase appropriate investments based on their stated investment objectives. Most are actively managed and all orders are executed and priced only once daily at the close of market trading. Most funds are either no-load or they charge an up-front commission, but exchanges within a fund family usually are free.

Exchange Traded Funds: ETF’s are similar to mutual funds in many ways. Their main difference is that ETF’s trade like stocks all day long and that their internal investment structure is usually established to mirror a market or investment index. They are not actively managed which keeps their trading expenses very low. Because they are traded like a stock, most investors will have to pay trading commissions every time you buy or sell shares.

Direct Comparisons:

1. Investment Performance: Winner – Mutual Funds. After using both of these investment vehicles for several years, I found that if you select the best mutual funds in their category, they will generally beat the performance of an ETF over time.

2. Transaction Costs: Winner – No Load Mutual Funds. Notice that I used no-load funds here specifically. If you use high commissioned funds, the ETF’s might win. Most good fund networks use no-load funds that have no transaction fees for trades that are held for at least 90 days. ETF’s incur a brokerage cost for each trade, just like trading shares of a stock.

3. Annual Expense Charges: Winner – ETF’s. Exchange traded funds are usually very low-cost because they based on an index. They have very small trading costs and only buy and sell the portfolio if the index is re-balanced. Most mutual funds are actively managed and this creates higher expenses.

4. Management: Winner – Mutual Funds. Most ETF’s are not actively managed so their isn’t a lot of management involvement. Most of the top mutual funds are actively managed and a quality manager can really add value to your investment bottom line. Their experience and strategic trading can be the difference between an average return and a stellar investment.

Summary: Based on my own experience and a head to head comparison over the past several years, I believe that high quality, actively managed no-load mutual funds are the clear winner for long-term investment gains. If you are looking at any one specific fund or ETF, you might be able to make a case for each, but if you are looking at the entire universe of these investments, mutual funds are your best choice today.

To discover additional investment, financial and income tax strategies, check out my blog or download your FREE Wealth Expansion Kit. The first step to creating wealth is knowing where you are and then charting a path that will enhance your financial strengths and correct your weaknesses.

About the Author:

Keith Maderer is a financial expert and has been a investment and tax adviser in the Western New York area for over 30 years. He is the owner of SENIOR Financial and Tax Associates and the founder of the Maderer Foundation, a private scholarship program.

Keith is also the author of “How To Get Your College Education For Less”. Available on Amazon.com – ISBN No: 978-1-4538-2053-7.

You can get your FREE Wealth Expansion Kit, or check out his blog by visiting http://www.sftaweb.com

What is no load mutual fund?

Mutual funds are known as pools of a capital. These are actually made by the combined investments of money by many people or individuals. So funds have some great advantages. These advantages are: professional management, a diversified portfolio. SEC (Securities and Exchange Commission) rules need all mutual funds to be published as a prospectus which will show much information that an investor actually need to know. So now you are clear about mutual funds. Now let’s talk about no load mutual funds. When you are going to perform the transactions with fund shares (when you are going to buy or sell or exchange your fund’s shares) and when no fees are included with any of these transactions, then it is actually called no load mutual funds. There are some sure kinds of funds shares around which can easily be mixed with the no load mutual funds.
Before investing money in any funds, you’ll have to read A to Z of that fund. In surface level, you’ll see that all the funds are equal as well as same. But in reality this kind of thinking is not true because every fund has its own investment tools with different return fees. So investors should choose best no load mutual funds, because these funds offer a higher return fee than other ones. There is a very good combination of financial instruments in the best no load mutual funds by including the collection of money from all the investors. It is recommended to have a good research in the market and also use a mutual fund calculator by which you’ll be able to compare the difference among the mutual funds.
Recently the no load mutual fund companies are trying their heart and soul to offer investors best terms along with the higher return fees.

What is Dividend Mutual Funds?

Mutual funds are known as pools of a capital. These are actually made by the combined investments of money by many people. So funds have some great advantages. These advantages are: professional management, a diversified portfolio. SEC (Securities and Exchange Commission) rules need all mutual funds to be published as a prospectus which will show much information that an investor actually need to know. Dividends are known as payments. These payments are generally made by the company or the fund, and it is paid to the shareholders. This is how they mark that the company has just made a very good profit. But you should know that paying the dividends is nothing but a sign. This sign shows everyone that the company’s or the mutual fund’s financial position is very solid. So the paying of dividends is very helpful for the present investors because they become very happy with the performance. It also attracts the other investors.

Generally dividends are paid quarterly by any dividend mutual funds. As there are many kinds of funds around, so how the dividends will be paid actually depends on that kind of fund. For example you’ll be able to see that really qualified dividends are mainly generated by RSI (real estate investment) trusts as well as bonds funds in the eye of IRS (internal revenue service). A very good method is also offered by mutual funds for being tapped into any dividend streams. It is not needed at all for the investors for finding any individual stocks. If there are many stocks found in a fund then you must think that the risk is very much lower.

Investors must need to find an established fund having a very good record of accomplishment while buying dividend paying mutual funds. That’s because a highly income fund will show very good yield stocks and also a diversified portfolio which will offer the needs for the dividend growth.

Stock Market is a term which evokes a spectrum of emotions in different people. Some strongly feel it is nothing but gambling, some others feel it is a sure fire way to lose money. A few get a high on trading in stocks all day long. Some use it wisely to increase their wealth. The fears associated with the stock market have come down significantly since the early nineties and now a majority of people feel comfortable investing in the stock market. The article is specific for Indian investors though most of the ideas expressed are universal.

Investing in the stock market requires careful study, constant review and quick decisions. Cherry picking a stock and keeping yourselves updated about the company and timing your buying and selling can take up a major part of your time. This is where the Mutual Fund industry can lend you their hand. A Mutual Fund is managed by a Fund Manager and a team of analysts who take their time to study the stock market and invest your money. It saves you from all the hassles of stock market investing and you also have somebody to take care of your money.

The Mutual Fund industry has come a long way since its introduction in India in the early 90s. Mutual Funds provide a variety of options according to your risk profile to get high tax effective returns. Having said that, I would caution readers that investing in mutual funds also needs a bit of effort from your side. Getting into the wrong mutual fund at the wrong time can destroy your wealth. The risks associated with investing in any asset class [Stocks or Gold or commodities or bonds] are applicable to mutual funds also. For the more conservative investor, mutual funds offer exposure to fixed income instruments through fixed maturity plan (FMP)/debt funds wherein your money is invested in debt instruments. FMPs/Debt funds are more tax efficient than direct investment in FDs or bonds/debentures etc. I give below some points that should be kept in mind while investing in mutual funds.

a. If you are looking at investing money for the short term (1-3 years) and want the best tax efficient return then go for Debt funds/FMPs.

b. If you want exposure to stock markets then remember that stock market returns can be achieved only over the long term as markets usually see- saws with an upward bias over the long term. So you may have to stick around for more than 5 years. Do not check your NAV(Net Asset Value) everyday and feel excited or melancholic due to the erratic movement.

c. There are more than 30 fund houses (AMCs) offering more than 700 schemes. Choose the AMCs that have been around for a long time (5-10 years would be a good metric). Do not diversify too much and stick to good fund houses. The details of fund houses can be found in the website of Association of Mutual Funds of India. You can also get the rating of each mutual fund on this website. Always check to see if the AUM (Assets under management) is high; this ensures that the Mutual Fund has the flexibility to take a hit in case one or two companies that they had invested in get into trouble.

d. Always remember that past performance is not a guide for future performance. Go for consistent performers.

e. Go for New Fund Offer [NFO] only during a significant downturn as this enables the fund to get into stocks at lower prices. For Debt funds opt for NFOs when interest rates start peaking. Do not get into an NFO because you are swayed by the smart ad in the media. Usually NFOs focus on the flavor of the season to tempt you [Commodities, Green Energy, Emerging markets etc].Some may play out; some will die a natural death. So exercise abundant caution.

f. The best time to start an SIP is when the market starts showing a downward trend and the worst time to panic and stop an SIP is when the stock market goes into deep decline. In fact this is the time when the real investors rub their hands in glee. So you should try and increase your SIP amount when the market is really down and then once the market bounces back you can go back to your regular amount. Fix a base and set a target – e.g., for every 100 point fall in Nifty index increase SIP by Rs. 1000 and reduce exposure similarly as the market bounces back.

g. Do not expect extraordinary returns. On a long term basis mutual funds give an annual return of 12-15%.

h. Do a review once a year and check out from sectors that you feel have peaked out.

i. It is recommended to have an SIP in an index fund/exchange traded fund (ETF). An index fund invests in companies that form the particular index. For example if the index fund is based on the Bombay Stock Exchange (BSE) Sensex, then it invests its funds in the companies that make up the index and the NAV tracks the BSE Sensex. This fund will always have a return that closely mirrors the return of the stock market. This is a very safe way and protects you from individual gyrations in stock price of a company or sector. The stock exchange will promptly replace a company from the index in case it starts underperforming and your fund does the same. So you are always assured of a return very close to the market return.

j. Do not confuse an insurance product which invests in the stock market with a mutual fund. They are two totally different products. Insurance products have high charges and give far lower returns than a mutual fund.

Mutual funds are ideal for people who do not have the time or patience to take the effort needed for successful stock picking. They offer the investor a wide choice of exposure to different asset classes and sectors according to risk profile and if chosen wisely can provide extremely satisfying returns to increase wealth.

The writer works as the Country Head for AGEM India Branch, the foreign branch office of the Euro 32 Million Spanish company AGEM S.A. He is in charge of the Indian operations and primarily engaged in sourcing of products from India. He is also Consultant, International Business Development for QualiMed Systems, a fast upcoming medical equipment start-up. His interest in investment started when his father introduced him to the stock markets in the early nineties in the pre-Harshad Mehta era. He also writes for the investment column “Money Matters” in the website Yentha.com.

How to Get Good Returns From Mutual Funds Investments? A money market fund is a mutual fund investment in short period of time, high fixed income securities. The ultimate objective of a mutual fund is to have a net asset value that does not deviate from $1 per share. For instance, if you invest $1,000 in a money market fund, the goal is to return $1,000 in addition with an annual interest. Losses in money markets have been uncommon, but sorry to say, they have happened before. Every mutual fund wants to be the best performing mutual fund in the region. This is because they want to attract people to invest more. The best performing mutual fund is basically the one that give the highest rate of return.

Interest rate that is paid to investors is based on the assets of the underlying fund. The yield is usually automatically reinvested into the fund through purchase of additional shares in the fund. This highest yield makes best performing mutual fund.

Investment is a risk management strategy. In order to apply this strategy, an investor will buy investments that have different risks. The higher the risk of an investment, it is higher the rate of return. A mutual fund enable an investor is able to gain instant access to a hundreds of individual stocks or bonds with the lowest investment cost. It is to be the best performing mutual fund. For example, investors can look for a low investment and get a high yield later.

Mutual funds are controlled by the US Securities and Exchange Commission (SEC). The SEC main function is to assure that risks are limited and investors’ interests are well protected. In other words, investors can voice out their dissatisfaction to US Securities and Exchange Commission (SEC). For instance, all the complaints will be forwarded to US Securities and Exchange Commission (SEC).

Gold mutual funds are defined as those funds which have got an objective and these are very much related to gold set out as the offering prospectus. There are some mutual funds which have title as “Gold mutual funds”. These funds are very much viewed as “specialty funds” only because of these best gold mutual funds’s portfolio focus on the gold mining stocks. But there are some more funds which have owned small amounts of gold bullion. Many gold mutual funds portfolios have concentration on the gold mining rocks while some funds have a very good knowledge to silver, platinum and also in the base metal mining stocks too. There are some precious metal companies which are situated in North America, South Africa and Australia. There are also some more funds which are in Morningstar’s group. They are engaged for gold investing. They have 65% of total assets in the securities of all the companies which are directly or indirectly or primary involved into the business of mining, distributing or processing or dealing with gold, silver, platinum or also into the natural sources.

And up to 35% of the gold mutual fund’s assets are mainly involved in all the securities of all companies which take off a part of gross revenues directly or indirectly, into the business of mining, distributing or processing or dealing with gold, silver, platinum or also into the natural sources.

In the end, it can be said that best gold mutual funds generally:

1. Have got a professional management as well as a very good range of security along with bullion investments in it around the expensive areas of metals.

2. Have an excellent performance which is really uncorrelated to the indexes of broad market.

3. Have or don’t have any kinds or correlation with any market.

Mutual Funds vs ETFs

Nowadays there is a competition between the mutual fund industries against the ETF. So it is recommended not to fall into any relationship without comparing the whole competition.

Working system:

Mutual Funds: Mutual funds are known as pools of a capital. These are actually made by the combined investments of money by many people or individuals. So funds have some great advantages. These advantages are: professional management, a diversified portfolio. SEC (Securities and Exchange Commission) rules need all mutual funds to be published as a prospectus which will show much information that an investor actually need to know. Mutual funds normally begin with a load of money along with a management team too. When all the investors send their C-notes to the fund which are called issued shares and then the management teams investigate and finds out what is needed to buy. There are many stock pickers and among 100% of them 20% are very much good at this job while 80% aren’t. These are all about traditional mutual funds. There is another index mutual fund which absolutely works same as the traditional ones but in these funds the managers have a ride on the bus and they eat sack lunches.

ETFs: These funds really works absolutely reverse of the mutual funds. They start getting an idea, tracking and index and after that they are actually born of stocks instead of money. There are some major investing institutions which are around. One of the major investing institutions is Fidelity investments. They control about billion of shared at once. So for making an ETF, they break a few millions of shares away in the top of the pile by putting a basket of stocks all together for representing the convenient index. After doing all this they send all the shares with a holder and after that a good number of creation units are received by them as return…