How can you find out what an investment fund costs? And what are those costs for?
How can you find out what an investment fund costs?
The cost of a fund can be found in the prospectus of the fund in question. You can also find an overview of the costs on the product fact sheet. Both of these documents are available on our website and in every KBC bank branch.
Entry charges and costs
Entry charges and costs are one-off costs that you pay when you purchase one or more shares in a fund. These entry charges pay for the creation, the legal obligations, the commercialisation and the professional support that you receive in your bank branch for each fund. The entry charges are often lower during the launch period, before increasing later.
Entry charges are stated as a percentage of the capital you invest, and are charged on top of the amount invested.
Management costs and fees
You pay an annual management fee for the management of your investment fund. These fees are included in the fund's price, so you pay no additional costs. In return for this management fee, you can rely on your risk being spread over a number of different asset classes (such as shares and/or bonds), on professional risk monitoring, and on the fund manager's business knowledge. The manager knows the financial markets like the back of their hand, monitors them closely and constantly reacts to any threats and opportunities that may present themselves.
If you were to manage your portfolio yourself – with individual assets such as bonds and shares and the same spread of risk – then you would be responsible for a large number of transactions. You would have to pay separate costs for each transaction, especially if these involve foreign assets. In that sense, it can be more advantageous to invest in investment funds than to personally manage your assets.
What's more, holding your KBC fund in a KBC custody account is free of charge.
Exit charges and costs
In principle, you don't have to pay any exit charges if you decide to sell your share in a fund. However, an exception applies to investment funds with an expiry date or a final maturity date. If you sell your share in a fund before the final due date then you will pay exit charges, which are stated as a percentage of the amount of the share being sold. These costs protect the return for other investors in the fund and meet the costs that the fund manager must pay in order to prematurely redeem your share in the fund.
The product fact sheet and the fund prospectus will always indicate whether or not any exit charges are payable.
Tax treatment
Like most investments, investment funds are subject to taxes and charges, such as the tax on stock exchange transactions or withholding tax. The tax treatment for your investment will depend on your individual circumstances and may change in the future. You can also find this information in the product fact sheet or the prospectus for the fund in question. Ask your adviser for more information.
