Ever since the whole Lehman Brothers debacle in ’08, there’s been a lot of suspicion regarding funds. In truth, Singapore’s tightly regulated finance sector makes it difficult for anyone to scam you (unless you choose to dabble in unregulated products, in which case no one can help). Still, here are some of the common traps to look for:

1. Hidden management fees

Ah, you’re savvy enough to know about fees! Congratulations. But that’s why many a sales brochure now advertises “low management fees”. Now ignore the management fees, and look for the Total Expense Ratio (TER) or Annual Expense Ratio (AER). Because that’s probably where you’re going to see the real cost. The management fee is just one type of fee that goes into running a fund: there are also marketing costs, staffing costs, legal consultations, etc. Many savvy marketers know that new investors have been taught to look for ......