Keytrade Bank – another offshore fund supermarket

Keytrade Bank is now in the broker directory. It offers stock broking services for a decent range of European markets, but the main reason it’s likely to be useful is its fund supermarket.

This is a similar offering to Internaxx, but covers more funds (although the two don’t overlap entirely – there are funds on Internaxx that Keytrade doesn’t carry). With no custody fees it may well work out as cheaper than Internaxx over the long run.

To read more on the options for expats and others struggling to find a fund supermarket that accept non-residents, see the guide to offshore fund supermarkets.


How fees affect investment fund returns

Most investors understand that the fees they pay to fund managers have an impact on their investment returns. But it’s easy to overlook quite how large that impact can be. It’s also easy to focus on the wrong fees – putting a lot of effort into reducing one, when it’s the other that matters more.

So exactly how much do fees matter and what should you do to cut costs? Let’s take a look at a real example.

Before we begin, let’s recap what fees we’re looking at. There are two different sets of fees that fund management firms normally charge. One is the entry fee or initial charge, a one-off fee levied when your investment goes into the fund. The other is the annual management charge, which is levied on a recurring basis.

There are some other possible fees to keep in mind. For example, an exit fee might be charged when you withdraw your money or a performance fee levied when returns pass a certain hurdle. But these are less common and so we’ll leave them out for simplicity.