You also have to find a fund that fits your risk profile and that has competitive charges and fees.
In addition, it’s important that you research the fund manager that will look after your investment. The best fund managers have a good track record of producing excellent returns and so it’s worth undertaking a managed funds comparison before you invest.
What do the top fund managers do?
Fund managers are responsible for managing a range of investment products including ISAs, unit trusts and open ended investment companies (OEICs). Their job is to maximise the returns on the fund so you get the best return on your investment.
Fund managers actively buy and sell assets within the fund in order to maximise returns. This is different from the top index fund managers whose investments are simply designed to track a share index such as the FTSE 100.
UK index fund managers typically buy and sell shares within their chosen index in the same proportions or hold a representative sample of stocks.
What to look for when you undertake a managed funds comparison
One of the best ways to identify the best fund managers is to look at the past performance of their fund.
Data about how well a particular fund has performed over recent years is available and you can often read biographies of the top fund managers to understand their investment strategy and to see what experience they have.
It is also important to understand where your managed fund invests. With hundreds of funds available you should research the options to find a fund that matches your risk profile. Do you want to invest in the UK or overseas? Are you looking for capital growth or for income?
When you undertake a managed funds comparison you should also consider the fees and charges levied by a particular investment. You can compare fund prices by manager and you will sometimes find that the best managed funds come with higher annual management fees.
Your alternative is to consider UK index fund managers. These funds typically come with much lower fees as they track a share index rather than being proactively managed by highly paid fund managers.
You should compare both options when you compare fund managers in order to find the right investment for your money.