A recent article in the New York Times, www.nytimes.com, tells trustees what they already should know: watch the fees which is spent investing the trust portfolio.
DON’T TRUSTEES ALREADY KNOW THIS?
- But the message is worth repeating:
- Palm Beach trustees: you need to know what you are paying for fees in those mutual funds which you invest in.
- Are you paying more than the industry norm?
- Do you know what the industry norm is for each type of fund or investment?
- Remember: beneficiaries of trusts look at your fees, costs and investment performance.
- If you are investing trust assets in actively managed mutual funds, you are paying a lot more than, for example, Vanguard’s index funds. www.vanguard.com
- And you are most probably paying considerably more than ETF’s (exchange traded funds) and other index investment vehicles.
- Here’s the link to the New York Times article: http://www.nytimes.com/2014/06/01/your-money/rules-of-the-fund-road-watch-the-fees-and-dont-look-back.html?ref=business&_r=0
Final Thoughts for Trustee Investments
- If you don’t have index funds, or ETF’s, you better know why and be able to justify the reasons.
- When things go south, as all markets do, and trust beneficiaries sue you for investment losses or breach of trust, you investment performance for your Palm Beach trust will be measured against ETF’s and index funds.
- Investing trust property does not require perfection under the Florida Prudent Investor rule, but you do need a plan.
Q: What’s your trust investment strategy?