help with H-L charts please

12tonelizzie

help with H-L charts please

Stochasticity

12tonelizzie wrote: »

When you look at 'Charts & performance' on H-L, there's a button to choose between 2 'Chart types', namely 'Price' and 'Total return'. When I change this, nothing on the chart changes. (I'm not talking about de/selecting the 'Chart axis' box.) Can someone explain this?

This would most likely be explained if you're looking at an accumulation units fund, wherein the price incorporates dividends and thus already reflects the total return. If you look at the same fund but the income units version, then there will be a difference between price and total return (that difference being the dividend income).

My underlying question is whether H-L charts show you the percentage by which your actual holding would have changed, with all charges (inc. tax at source) taken into account. So if you're comparing 2 similar funds with different TERs, are those TERs built into the performance as shown on the charts?

I assume so but am not sure.

Also, if you have accumulation funds which pay interest rather than dividends, then presumably your holding will change differently according to whether or not it's held in an ISA (interest not taxed). Is this reflected in the performance chart of an interest-paying accumulation fund?

Almost certainly not, no.

Stochasticity

12tonelizzie wrote: »

Ah, I hardly ever look at income units - that's why I never noticed!

To take an example, I see that Aegon's High Yield Bond over 5 years comes out roughly 40% higher with acc units (= total return with inc units) than with inc units at Price. Taxation of the interest distributions would make a considerable difference to this, even at the basic rate. If this fund had been held in an ISA for 5 years, would the difference be 40% plus a fifth, i.e. 48%?

Basic rate tax on dividends is 10% and can't be reclaimed (even if you don't pay income tax). Dividends are always paid net of that 10%.

I imagine that the graph includes this tax as it is completely unavoidable, whether held in an ISA or otherwise. But I don't know for certain.

A S&S ISA is only more tax-efficient for higher-rate taxpayers who pay 10% tax on dividends within an ISA but 32.5% outside one (and top rate payers who pay 10% and 42.5% respectively). The HL graphs definitely wouldn't be including the additional dividend tax.

Stochasticity

12tonelizzie wrote: »

I'm not talking about dividends, I'm talking about interest distributions.
E.g. http://privateclient.chartwell.co.uk/taxation_of_unit_trusts_oeics.htm
Income from fixed interest funds (such as Corporate Bond funds, Gilt funds etc) is treated differently to equity income. Distributions from fixed interest funds are paid net of 20% tax. For example:
Interest £100.00 Less 20% tax £20.00 Net Interest distribution £80.00
· Non taxpayers can reclaim back the £20.00 tax deducted.
· 10% starting rate taxpayers can reclaim half the tax (£10.00).
· Basic rate taxpayers have no further liability.
· Higher rate taxpayers are subject to a further 20% (£20.00) tax.

I assume that interest distributions are paid gross in the H-L ISA, but I'm finding it hard to establish this for sure online.

Sorry, not paying enough attention.

Bond distributions will be tax-free in an ISA though, yes. No income or capital gains tax to pay on ISA investments, just the withholding tax on dividends.

From Vantage Key Features: "What tax will I pay? Within Stocks & Shares ISAs there is no capital gains tax to pay on any gains and no further tax on the income. We can also reclaim the 20% tax deducted from the income paid by corporate bond funds."

You're right that it is a bit vague.

jimjames

The disclaimer states: "Price total return performance figures (Discrete Calendar Year Performance) are calculated on a bid price to bid price basis (mid to mid for OEICs) with net income (dividends) reinvested."

The problem is that this is a bond fund so does not pay dividends but interest. It would be worth calling HL to clarify, past experience has shown that they have been very good answering queries.

Totton

Hi,
Looking at the charts in the ISA a/c, Fund a/c or not logged in shows they all display the same values.

HTH,
Mickey