If you think the 5-7% initial service charge is too high for equity funds, you can always consider bond funds. A bond fund initial service charge is ~0.25% only. The risk is lower than equity funds, and of course the long term return is lower too.

In fact, if you think the stock market is too high now, the potential to grow higher is v limited and still wish to make more return than the 3.7% FD rate, then bond fund could be a good option.

The charges arent likely to go down by much in the near term as our unit trust industry is not as competitive as in USA. One needs to acquire SC approval to sell a fund in Malaysia. If SC doesnt open up the market to more new big players, there will still be the same players who control the market ie public mutual, OSK, CIMB etc.

Presently, there are some mutual funds selling at lower initial service charge, but when you sell the funds, they charge you again on repurchase fee which end up still about the same to the industry standard of 5-7%.

Another kind of fund like islamic fund charges you close to nothing when you enter the market, but they take profit sharing of 15% from the fund. Depending on the horizon of your investment, it could well be over the 5-7% charges in long term.

All in all, these companies are setup to make money. If you think you are well equipped to invest on your own, go ahead. Nobody would stop you.

From an investor perspective, if you wait for the charges to be reduced to minimal, it could take many years... And you are losing because of the present opportunity cost to make money. Yes, a bit less after the service charge, but still greater than FD in long term, dont ya agree ?

Investing in foreign currency expose you to additional risk, especially with the USD not looking so promising to many people. There are other issues like liquidity as well, how long its gotta take to sell off your foreign investment, convert the USD to RM and wire back to my local bank at minimal cost ? I do not have an account with ETrade, perhaps someone who does can tell us more about it.

If you think it justifies the extra risk, go ahead. I personally dont recommend anyone to invest like this with more than 20% of the portfolio. There are quite a few local unit trusts that outperform the KLCI index even after the service charge too if you havent noticed.

Any idea what portal is that ? Tune money ? If its Tune Money, then CIMB will be involved. Other big players like Public Mutual, OSK position wouldnt get affected much also.

Fund managers need to make a living too. Its not that easy to setup a good fund with a good manager unless Tune Money is able to attract multi billion dollar investment where the 0.x% charges can translate into a handsome amount of wages to these managers.

The top fund managers in the world make several hundred mil USD to 1 bil USD annually.

A capital guaranteed fund doesnt protect u against inflation risk. It looks like you can secure your initial investment, but in reality you can still be losing in terms of real value of your investment.

And do you think the feature capital guarantee really come at FOC ? Hehe not at all. The fund might pay a sum of money for the 'insurance' or choose a more risk adverse investment strategy that result a less return compare to a similar fund w/o capital guaranteed. In the end, it still come at the expense of the investors.