Fees and Expenses
The role of costs in investment success is very often underestimated. With some financial products, they can add up to several percent of the invested amount of money annually, and can significantly affect performance. Besides, it is often very difficult to even identify them.
Therefore we examine and evaluate all the visible and hidden costs of investments for you.
What expenses are incurred?
- Buying, selling and holding stocks and bonds are linked with transaction costs and deposit charges. These are relatively evident and can easily be recognised by every investor.
- The indirect expenses are less obvious. These originate from the profit margin in the spread between purchase prices and sales prices (bid-ask spread) of brokers and market makers. We measure them and incorporate them in our analysis.
- With regard to funds, there is a series of fees that are not evident to the investor at first sight. They can be relatively well derived, however, from the statements of the fund management companies. We assess these expenses and make them comparable.
- With investment certificates, however, it is often very difficult to uncover the expenses that are hidden in the financial instrument. They contain a huge number of implied fees and hidden profit margins that we can uncover - if necessary - using simulation models.
Long-term investors have a natural advantage with expenses. As they only rarely reallocate their capital, transaction costs occur less often. Still one must be aware of direct and indirect - as well as visible and hidden costs – in order to achieve an outstanding investment result.