Of all the benefits of managed funds I think this is the most beneficial to retail investors.
Imagine this : Ten years ago, 2 investors bought into a newly launched equity fund at the starting Net Asset Value per Unit of 1.00, one invested 5,000 and got 5,000 units (assuming no transaction costs), the second one invested 100 million and got the corresponding number of units.
They cashed in at the same time recently at 2.00, both enjoyed an ROI of 100%!
(See post on critical mass)
that is why it is a good idea to accumulate shares spacially that of a good fund
ReplyDelete