Inexpensive Mutual Fund Investing from Commonwealth Bank Account

Hi,

I have about $200K in fixed term deposits at CBA which is earning nothing. How can I get them invested in low cost funds?

The CBA funds via FirstChoice Wholesale Investments seem to be quite expensive (close to 1% PA).

Thanks in advance.

This forum or any forum for that matter cannot give financial advice. Suggest talking to someone. If uncomfortable with financial advice, try doing your own research. First up you need to understand your risk tolerance. The fact you are in a fixed deposit indicates you have a low risk view. There are on line risk assessment you can do which may help.

Next suggest reseaching, hybrid shares, ETFs, LICs and REITs to find something that suits your risk appetite

I invest in the hybrid shares, LICs and ETFs as well as shares directly, but find as I am in retirement and looking at leisure time, the desire to have direct shares is reducing.

My holdings include ANZPG for hybrid shares, IVV, VEU, for ETFs, PL8, WAM for LICs, WPR, AVN, for Reits

AFI and ARG are also worth reviewing for LICs, VAS, IOZ, for ETFs, and VAP is a reit based ETF

The big four banks give good return and include franking credits, but whether this helps depends on you own financial position.

Many financial institutions will give you a free up front discussion for about an hour to outline options and the cost of their services. Based on your own statement, you are getting nothing out of the fixed deposit so some money invested in financial advice or your own research makes sense. Buy some books and the AFR and read it back to front regularly, talk to friends etc who are more investment savvy to give their experience.

There is a gap in Australia for financial advice and many seem to be biased towards their own products, which getting you to do your own research makes sense.

But as I always tell my son, you need to be able to sleep at night with the investments you make. And understand the fees attached which you do seem aware of.

Iggy

Thanks @Iggy_Pop ! To be clear I wasn't asking for advise on individual stocks/funds, rather whether funds with expence ratios below 0.5% exist that can be purchased from an CBA account.

MrCheapo said:

Hi,

I have about $200K in fixed term deposits at CBA which is earning nothing. How can I get them invested in low cost funds?

The CBA funds via FirstChoice Wholesale Investments seem to be quite expensive (close to 1% PA).

Thanks in advance.

Click to expand...

Need to research all the funds and check performance and fees. There's a few web sites that do that but they'll probably edge you towards funds they have a particular interest in.

I've just done a google and found this site that gives some ideas.


I used to have a subscription to Money Magazine that had a comprehensive list in the back but not sure if they still do it.

Better yet, have a brother who is the head of managed funds research in an international financial services company.

MrCheapo said:

Thanks @Iggy_Pop ! To be clear I wasn't asking for advise on individual stocks/funds, rather whether funds with expence ratios below 0.5% exist that can be purchased from an CBA account.

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If fees are your focus, ETFs are as low as 0.04% on IVV and most ETFs and LICs are below 0.5%. ETFs leave out the middle man, which is why managed funds are 1% plus with fees. Best of luck with you research, and agree wth sean, invest smart is worth a look

The latest money magazine has a story from a contributer with 750k in term deposits and this person is diapointed with returns. Paul Citheroe recommends, see a fee paying financial adviser, or look at ETFs by Vanguard or Blackrock or look at LICs such as AFI and ARG.

The ETFs and LICs can be purchased from a commsec account and fees are below 1% per annum.

Iggy

MrCheapo said:

Thanks @Iggy_Pop ! To be clear I wasn't asking for advise on individual stocks/funds, rather whether funds with expence ratios below 0.5% exist that can be purchased from an CBA account.

Click to expand...

Hello @MrCheapo

This is a link to the ASX web site showing a list of ETPs. The list shows each ETF that is listed on the ASX, together with management charges.

KH

MrCheapo said:

To be clear I wasn't asking for advise on individual stocks/funds

Click to expand...

Just in case you're not aware, the word "advice" has a specific legal meaning and the law precludes someone without the appropriate license giving it. Hence the sensitivity to the word on this and other forums.

We can however most certainly give opinions or discuss the attributes of different stocks or funds, so long as we don't "advise" you to invest in them.

It's a legal thing set by government, it's not a rule unique to this forum.

With that in mind my opinion is start by researching what you want to invest in and then look for ETF's or funds which do that.

For example you might decide that you want to track the S&P500 index or you might decide that you want to invest in resources companies or whatever. Note those are examples not a recommendation. There are ETF's which do both of those and many more either very broad (eg tracking a major share index) or far narrower (eg the ETF or fund invests only in agricultural companies or only in gold mining companies).

For ETF's this list is one starting point: https://www.marketindex.com.au/asx-etfs#commodities-broad-exposure

An ETF is bought and sold exactly the same as a share using any broker eg Commsec, Nabtrade or any of the many others.

Remembering that's not "advice" as per the law, it's just sharing information which is fine.