I am new to investment and thought that I would start by investing in either a managed fund or an ETF.
I would be looking to use a technique such as dollar cost averaging, consistently investing a small amount over the long term.
I was trying to figure out, when looking at fee's and brockerage charges which would be cheaper, using an ETF or a managed fund.
Taking Vanguard as an example. . . .
If spent $1000, then sold after a year (amusing no change in value to make things simpple)
Buy = 0.2%
Fee Per Anum = 0.75%
Sell = 0.1%
Spend $1000, get $998 worth
1 year Annual fee = $998 x 0.0075 = $7.485 so have $990.515 left
Sell after 1 Year cost = $990.515 x 0.001 = $0.99
Therefore have $989.525 left
Total Cost = $10.475
Brockerage = $20
Fee Per Annum = 0.27%
$20 brockerage = $980
Anual Fee = $980 x 0.0027 = $2.646, so have $977.354 left
Sell after 1 year = $20 Brockerage = $977.354 - $20 = $957.354
So total fee’s = $42.65
So it looks like the fee's associated with investing in a managed fund are less?
I just realised I haven't taken into account that if I am investing say 10 lots of $1000 over the year, if sold the sell spread will apply to the whole lot, while the brokerage will likely be a flat rate. . .
Still, I think funds seem like a more reasonable option?
Just hoping someone could check over my thinking, make sure I haven't made any mistakes