When an adviser picks a unit trust fund for you, don't expect the fees charged by the fund to be foremost in their mind. Things like the past performance of the fund, performance relative to a peer group, volatility, the fund manager's investment style and the fund manager's tenure will rank as more important to the adviser than the fees you are going to pay. This is according to research by Shaheed Mohamed, a product development manager at Allan Gray, into how advisers choose funds from a universe of more than 1,350 unit trust funds. But the impact of fees on an investment is key - and not well understood by investors. Consider this example provided by index-tracking asset manager 10X: assuming you saved R3,000 a month for 40 years and invested in a high-equity portfolio that delivered inflation plus 6.5% before fees, you would have R5.1-million capital at retirement, if you paid 1% in fees. But if you paid 2% in fees, you would have only R3.8-million at retirement. And if you paid...
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