Money: More funds around for investors to consider

By MARK FRYER

Is a prize-winning fund manager the best place for your investments?

Possibly - but not necessarily.

Before parting with your money, it's worth keeping in mind that competitions such as the Morningstar / Business Herald awards don't cover every player in the fund management game.

For a start, the awards exclude passive funds - also known as index funds - which, by definition, are not "managed" because the people who run them don't make any investment decisions.

Nevertheless, such funds will be precisely the right place for many investors to put their money, largely because of their low cost and tax effectiveness (passive fund investors don't pay tax on any capital gains, unlike investors in actively managed funds, which are taxed on their gains).

Since the awards are limited to New Zealand-domiciled managers, they also exclude overseas-based investments, such as UK-based investment trusts, which can also be very attractive from a tax and expenses point of view.