Getting a fair deal
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Focus on the income you need, not just potential bequests.
PHOTO: PEXELS
Check total expense ratio: If an investment portfolio has zero fees, ask about the total expense ration (TER) of the underlying fund. As a guide, look at the Central Provident Fund (CPF) Investment Scheme TER caps, which range from 0.35 per cent per annum for low-risk funds to 1.75 per annum for higher-risk funds.
Be wary of cherry-picked returns: Don’t rely on forecasted returns. Historical annualised returns provide insight, but watch for cherry-picking of return periods presented – for example, those indexed to market lows in 2008/9. Investigate the worst drawdowns and yearly returns.
