Time to change from a tracker to a managed fund?

black_taxi_2

but diff funds have diff annual charges?

jimjames

black_taxi wrote: »

but diff funds have diff annual charges?

Yes. The key figure to look at is the TER (Total Expense Ratio) TER is a fixed % for a fund so determined by fund value not the number of purchases.

1% TER would equate to £25 on £2500 investment

black_taxi_2

so you have two charges ---one by the fund--the other is annual charge

say selftrade/td waterhouse

jimjames

black_taxi wrote: »

so you have two charges ---one by the fund--the other is annual charge

say selftrade/td waterhouse

No, the annual charge (TER) is by the fund. With HL you pay no fee to them for providing the service.

psychic_teabag

I read an article recently that said that costs due to churn were not included in the TER. http://monevator.com/2011/02/02/turnover-trackers/

Linton

black_taxi wrote: »

so you have two charges ---one by the fund--the other is annual charge

say selftrade/td waterhouse

In terms of actual payments you make, you dont really have a charge by the fund. Fund charges are incorporateed into the price.

So a fund "charge" is more or less the equivalent of the difference between what Tesco pays the farmer for his apples and the amount Tesco charges you as the customer.

Buying funds purely on TER is like choosing to buy Golden Delicious, whether you like then or not, because you happen to know that Tesco makes a lower profit than on Braeburns.