Top 10 funds available in Hong Kong

Invest, invest, invest. This is the repeated refrain from financial planners and related advisers. Investing and re-investing delivers the magic of compounded returns. It also creates a discipline - people will be less able to fritter their cash if it's locked up in a fund.

But, for those who wander into the nearest bank branch with a vague plan to buy a fund, you might want to consider what you are getting into.

Money Post surveyed financial planners and private bank investment specialists to get their top fund picks. The criteria for selection were low fees, strong returns and good governance.

Fees are important. One might think, 1 per cent here or there won't make much difference, but in fact the impact on long-term compounded returns is dramatic.

"Fees have shown to be the best predictor of long-term returns … regardless of past performance. For example, a 3 per cent sales charge and 1 per cent annual expense ratio for a bond fund when the interest rate for a 10-year Treasury bond is around 1.6 per cent would be really bad," says Tony Noto, a Shanghai-based financial planner.

Performance is another issue. There is a whole body of thought that says that stock picking or other forms of active investing is folly, and that people are better off to choose a low-fee fund that passively tracks an index. Others say a skilled fund manager can add a lot to returns.