Is not-for-profit better?
3.8 Is not-for-profit better?
Industry funds often describe themselves as 'not-for-profit', meaning their fees generally match their costs because they do not need to make a profit for any shareholders. Retail funds, i.e., master trusts, on the other hand, because they are operated by commercial entities must try to make a profit and so they have to charge fees that are more than their costs.
But while being not-for-profit sounds noble, the hard-nosed question is whether being not-for-profit makes a fund better, or does it just make it different?
One should always compare funds' investment returns, choices, fees, insurance and extra features. Being not-for-profit doesn't make the fund better, it just explains its background and where it came from.
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Last modified: Wednesday, May 5, 2021