AMC or TER charges - How applied

nxdmsandkaskdjaqd

I wanted to understand how the AMC or TER charges are actual applied/taken from a Unit Trust?

I understand that the charges are taken on a daily basis, correct?

The performance charts that we view on sites such as Hargreaves Lansdown, are we seeing the Gross or Net values with respect to the AMC or TER charges?

Generali

nxdmsandkaskdjaqd wrote: »

I wanted to understand how the AMC or TER charges are actual applied/taken from a Unit Trust?

I understand that the charges are taken on a daily basis, correct?

The performance charts that we view on sites such as Hargreaves Lansdown, are we seeing the Gross or Net values with respect to the AMC or TER charges?

Charges are usually applied to a fund on a daily, weekly or monthly basis depending on how often it is priced.

AIUI, performance charts can be either net or gross. Anyone that tells you that gross performance matters to a small investor is on commission.

dunstonh

The performance charts that we view on sites such as Hargreaves Lansdown, are we seeing the Gross or Net values with respect to the AMC or TER charges?

The returns are net of retail charges. Some of the fund data suppliers allow for the display of returns net of explicit charging structures (as may well become the norm from 2013) but for now, you see them net of retail charge. (i.e. if the fund publishes an AMC of 1.5% and TER of 1.68% then the performance data is net of that. if you invested on that very day in the past, that would be your actual gain.

With certain funds and certain fund data suppliers, they may be understating the return. For example, fixed interest sector funds in an ISA can reclaim the tax paid. Unless the charting software is set to gross, it will assume net returns.