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Hi weijian,
The problem of "fund of funds" structure is actually not the fees. Normally, fees will be rebated back by the fund manager.
The problem is actually tax transparency, and this becomes more important for Singapore listed REITs since distributions are not taxed. If the REIT invested in fund, there must be a way for it to receive income, normally in a form of dividend out from it. Therein lies the question - How efficient is the tax structure of the underlying funds that they invested in? Will it be taxed? Normally, it will and that becomes a problem. Why I want to invest in a REIT structure to be taxed on income?
The problem of "fund of funds" structure is actually not the fees. Normally, fees will be rebated back by the fund manager.
The problem is actually tax transparency, and this becomes more important for Singapore listed REITs since distributions are not taxed. If the REIT invested in fund, there must be a way for it to receive income, normally in a form of dividend out from it. Therein lies the question - How efficient is the tax structure of the underlying funds that they invested in? Will it be taxed? Normally, it will and that becomes a problem. Why I want to invest in a REIT structure to be taxed on income?