Understanding AMP Managed Funds fees
An investment in a managed fund will incur a small fee that covers the investment knowledge and expertise you’ll gain access to, and the admin of making and managing the fund you invest in.
You’ll pay for AMP Managed Funds through annual fees, represented as a percentage of the net asset value. These fees are automatically deducted from your investment once a year.
Small fee differences can have a big impact on your investment over the long term. By carefully choosing a fund with low, simple fees and good performance, you can grow your investment far more efficiently and effectively.
AMP Managed Funds fees
AMP Managed Funds fees are made up of two components:
- Management fee: This fee covers general admin costs and investment management services, including those of the underlying fund managers.
- Costs and expenses: The fees charged by the underlying funds include custody, accounting, audit and regulatory compliance costs, and the Supervisor's fee. These charges are termed ‘costs and expenses’ and are estimated.
Both fee components are deducted from your managed fund annually as a percentage of the net asset value of the fund, and this deduction is reflected in the fund’s unit price.
So how much will you be charged currently when you invest in an AMP managed fund? It can depend on the fund you choose to invest in.
Management fee:
0.74%
Costs & expenses (est):
0.04-0.07%
Total annual fund charges (est):
0.78-0.81%
An example of AMP Managed Funds fees
Matt invests $10,000 in the AMP Growth Managed Fund, which has an estimated annual fund rate of 0.79%. If the value of Matt’s investment doesn’t change over the first year, his annual fund charge will work out to $79 (0.79% of $10,000).
Keep in mind that these fees will be slightly higher or lower if the net value of Matt’s investment has increased or decreased through the year. These fees may vary slightly between AMP Managed Fund types, so this example may not be representative of the actual fees you may be charged.
As with other managed investment funds and comparable financial products, AMP Managed Funds may charge individual action fees for investor-specific decisions and actions, such as overseas transfer fees and separate fees charged by your service provider.
GST will also be added to fees and may be included in some expenses where applicable. Currently, we charge GST at the standard rate of 15% on 10% of the management fee charged, per Inland Revenue rules. For more information, check the fees section in the AMP Managed Funds - Other Material Information document.
FAQs
Is a 1% management fee high?
Passively managed funds, like AMP Managed Funds, generally offer lower management fees compared to actively managed funds as the fee doesn’t need to accommodate for fund managers time researching and their trading costs.
A 1% management fee may be seen as high to those who are invested in a passively managed fund whereas it may be viewed as low for those invested in an actively managed fund.
That said, any investor must gain context on any management fees they’re being charged, as different fund managers will have different fee inclusions (and reasons for those fees and inclusions). Past and future performance, including past and future returns, will also determine whether a particular management fee should be considered ‘high’.
Are mutual funds worth the fees?
Every investment decision should be made based on the net potential return, and it’s wise to seek financial advice from a professional.
Mutual funds like AMP Managed Funds are a fantastic option because they clearly outline past performance and applicable fees – currently just 0.78-0.81% per year – allowing you to make an educated investment decision.
AMP Managed Funds offer the ideal balance of stability and flexibility. Your money is pooled with other investors, allowing you to access investments that you couldn’t afford as an individual. You can choose your level of risk through our different fund options, and you can withdraw your money whenever you choose.
In short, mutual or managed funds are certainly worth the fees for anyone looking for a dependable, long-term investment.
Do fees affect how much money I make from a mutual fund?
AMP Managed Investment Funds fees are automatically deducted from your investment. This happens once a year at the estimated rates stated above, and the deduction is reflected in the fund’s unit price.
We do not currently charge any withdrawal fees unless that withdrawal involves an overseas transfer. For more information, see the AMP Managed Funds - Other Material Information document.
The annual fund charges outlined above are the fees charged by AMP.
The Management fee is used to pay for the general administration costs of the funds and the investment management services, including those of the underlying fund managers. These charges are deducted from, and reflected in the unit price of, the funds concerned.
The costs and expenses component of annual fund charges includes the costs and expenses charged by the underlying funds. These include the Supervisor's^ fee, custody, accounting, audit, and regulatory compliance costs. These charges are estimated. Costs and expenses are not charged to the funds. Instead, the costs and expenses are charged to the underlying funds that the funds invest in. This charge is then reflected in the unit price of the funds.
^Supervisor means Public Trust, which is the supervisor of the underlying funds.
All fees are disclosed on a before-tax basis. GST will be added to fees and may be included in expenses, where applicable. See the ‘AMP Managed Funds - Other Material Information’ document for more information.