Selestia Funds List 'discount charge' Q.

KevWal

Hi

I'm trying to understand the Selestia Fund list doc and am strugaling on one item:

http://www.selestia.co.uk/literature/FundsList.pdf

The fund table has a 'discounted charge' col, which is desribed as "Discounted charge shows the discounted percentage charge
paid to the fund manager when accessing these funds
through Selestia" Is this a one-off setup charge, if so is it discounted off the 5.2% Selestia setup charge? Or is it an annual charge, discounted off the fund manager annual charge? Or?

I was also trying to work out the fund based trail commission, but have found that now:

0.50% p.a. Equity/Managed funds
0.35% p.a. Fixed Interest and Property funds
0.25% p.a. Tracker funds
0.00% p.a. Cash funds

Thanks
Kev

dunstonh

On pensions it is 5.2% (ISAs 5%). The initial commission is 4%, which if not taken means it is 1.2% intial charge unless the funds list indicates a further charge. This usually applies to soft closed funds or funds where the manager/fund house doesnt want to discount.

So, if the funds list shows 0.25% discounted charge then that means it is 1.45% initial charge. If it shows 0.00% then it means it is 1.2% initial charge.

The initial charge is as it sounds, a one of initial charge.

Annual management charges are the same across the board generally regardless of where you buy them.

Fund based commission is not a standard 0.5% across the board. Different funds pay different trail commission. The list you have there indicates the trail commission on the different types. This can vary a little with different fund supermarkets but that has no difference on the annual management charge unless rebated.

KevWal

Thanks Dunston, understand the discounted charge now as an additional initial setup charge on some funds.

Cheers
Kev

dunstonh

Its a question that gets raised fairly often with various fund supermarkets and has been mentioned about HLs site as well. They dont exactly word it in a user friendly manner.

Perhaps the worst example of a fund to invest in right now is the AXA Framlington UK Equity Income fund. It has an additional charge of 5.25%. This fund is soft closed. This means that the charge is there to put you off investing in it because the fund manager doesnt want any more money in there. If you do decide you want it, then you pay a lot for doing so.

If you look on HL's site, you will see that they have a big initial charge on that fund as well. You do tend to find that increased initial charges are generally comparable.