Costs to get into and out of investments

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If you buy a share, you pay the offer price and receive the bid price to get out. On top you have stamp duty and any dealing costs. All very simple.

Move to a fund and I understand that you still have a bid / offer spread (or do you ?) and then you have up front charges, some of which you may be able to avoid or have reimbursed but when it comes to liquidate, I am out of touch with the market.

I've heard about market value adjustments and so forth, all cons IMHO. What else is there ?

My rationale is that rather than looking to a 2 year horizon where I was going to remain largely in cash with some CFD trading, I am now looking at a 4 year horizon and thus, I want to investigate collective investments etc. What I am having trouble with is working out the likely impact of entering and particularly exiting an investment.

Also, I think I read recently about additional hidden charges which were not being listed in the total expense ratios etc.

Any help much appreciated.

Reaper

The usual fund type is the Unit Trust. You can avoid the initial charge by using a Discount Broker.

There is still an Annual Management Charge (AMC). Better than that figure is the TER. However better than both of those is the effect it has. In the Key Features look for an illustation saying e.g. "The effect of these charges would be to reduce a growth of 7% to 5.9% over the year" because that includes everything.

However if you are already comfortable with share buying another possible option instead of Unit Trusts is the often overlooked "Investment Trusts". These are slightly different in that you buy shares in a company whose sole job is investment rather adding to a Unit Trust pot. The charges are different and can work out cheaper in the long run, but read up on them first as they differ to Unit Trusts (eg they can borrow to invest).