I see questions around a few things in comments and emails regularly, and thought I’d write a quick post addressing some of the simpler ones (who likes complicated stuff anyway).
Mutual Fund and ETF Expenses: All ETFs and mutual funds incur expenses, which are usually expressed as a percentage of their assets. The higher the expense ratio, the more expensive the fund is. So, you should compare expense ratios and go for one that has a lower ratio (other things being equal).
Underlying assets: It is not necessary that all Gold ETFs have gold as their underlying asset also. Some funds may have stocks of gold mining companies, others may just hold future contracts that track a gold index, and some others may own physical gold. You need to find out what is the underlying asset of a particular fund, so that you know it matches what you had in mind. Here is a post I wrote some time ago about different type of commodity funds.
Fund of funds may charge double fees: Fund of funds own other mutual funds. If a fund of funds charges you fees, then that means you end up paying double fees. Once for the fund of funds, and then for the mutual funds that such a fund owns.
No notification on allotment of IPOs: This one is specific to Indian IPOs and causes a lot of grief to investors. You don’t get emails or any other notifications when an IPO allotment is done. You need to keep a tab on the allotment and listing dates yourself. A good way to do this is by setting Google alerts.
These were a few things that I have recently seen, and if you can think of anything else, let’s hear them, and try and find an explanation to them.
