You may not be able to predict how your investments will perform, but you can gauge how much of a bite costs will take out of your bottom-line returns.

Managed funds can be a cost-effective way to buy a variety of securities. But, in some cases, steep sales commissions, excessive management expenses, high fees and other operating expenses can offset the efficiencies of fund ownership. You need to closely scrutinise all costs involved before investing in a managed fund. Be aware that index funds have lower management fees than most actively managed funds. In fact, Vanguard's retail fees are around half the industry median.

The types of fees managed funds may charge include:

• entry or establishment fees
• contribution fees
• withdrawal fee
• exit or termination fees
• management costs
• buy/sell spread
• master trust and platform fees

Not all funds charge all of these fees, so check the PDS for information on fees before investing.