Hargreaves Lansdown unveils new Wealth 150+ list

joerugby

koru wrote: »

Why would income reduce? Clean funds come in income classes, so you could get the same income. In fact, slightly more, because funds usually take the AMC out of income, so the lower AMC on clean funds means more income available to be distributed, so the yield on the clean fund is higher than on the equivalent dirty fund.

On pretty much all of our funds the amc is taken from capital, so when rebated it adds to our income and pays for the HL fee and leaves a surplus. I'm happy with that

joerugby

masonic wrote: »

Everyone will be forced into clean funds in 2016 so that will resolve HMRC's position on taxing rebates.
It's hard to say what will happen in the interim.

I thought that rebates were going to have to be in units rather than cash from 2015? Is that just an interim step?

zagfles

koru wrote: »

However, if you already have an account with a flat fee platform (so you are already paying the flat platform fee), this fund costs 0.23% TER.

Edit: but watch the bid-offer spread, even on the clean class.

This is confusing me. Take for instance Artemis Strategic Assets class I Acc. This currently has a sell price of 78.30 and buy 79.41, ie a 1.4% spread.

According to HL there is 1% initial charge which they refund.

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/a/artemis-strategic-assets-class-i-accumulation

According to Fidelity there is no initial charge but there is a buy/sell spread, and it doesn't look like they refund any of the "initial charge" in the spread. https://www.fidelity.co.uk/investor/funds/fund-supermarket.page#NAME|Artemis (sorry direct link didn't work but it's in the list on this link)

II say there is no initial fee as well but the show the same buy/sell prices http://www.iii.co.uk/investing/factsheet/F5A7

So is this fund 1% more expensive to buy at II or Fidelity than it is at HL?

ColdIron

joerugby wrote: »

I thought that rebates were going to have to be in units rather than cash from 2015? Is that just an interim step?

This could be a sticking point, technically you cannot use the loyalty bonus directly as a form of income but you might be OK for the funds you currently hold. I'm not sure where this sits regarding the tax issue

For funds purchased after 1 April 2014 we will reinvest all the loyalty bonus clients receive in each account into the largest fund holding in that account once it reaches £50. This is because the new FCA rules require that discounts on fund management charges (such as our loyalty bonus) must be paid to clients in units in a fund for all new units purchased. If you wish to sell some of that fund holding to turn your loyalty bonus into cash, you can easily do so at no charge because you can place fund deals for free

masonic

joerugby wrote: »

I thought that rebates were going to have to be in units rather than cash from 2015? Is that just an interim step?

I haven't come across anything suggesting a transition to unit rebates on legacy investments in 2015, but HMRC have already made it clear that rebates will be treated the same, whether they are in the form of cash or units (brief 04/13 - edit: see section "Note on Financial Services Authority (FSA) Retail Distribution Review (RDR)").

The RDR rules will come into force for legacy investments from 6th April 2016 (for example, see HMRC's PS13-1 page 15).

Porcupine

Rollinghome wrote: »

Another interesting one is Standard Life UK Smaller Companies. It's already bigger than the Cazenove UK Smaller Cos fund which the managers recently decided to hard close because they thought it was getting too big for a small cos fund to maintain performance. Is the Standard Life fund set to get a whole lot bigger and, if so, is it really one to push at this point?

What is puzzling is the SLI fund is soft-closed. Usually closed funds are not permitted on marketing lists like the W150 - which causes HL to write coded 'research' that says things like 'this fund has topped the table for the last 5 years but it's not one of our favourite funds'. So either HL have decided to give a gift to existing fundholders (as one of whom I'm not complaining) or it's to be reopened. I can't work out which.

koru

Porcupine wrote: »

What is puzzling is the SLI fund is soft-closed. Usually closed funds are not permitted on marketing lists like the W150 - which causes HL to write coded 'research' that says things like 'this fund has topped the table for the last 5 years but it's not one of our favourite funds'. So either HL have decided to give a gift to existing fundholders (as one of whom I'm not complaining) or it's to be reopened. I can't work out which.

Apparently reopened:
http://www.hl.co.uk/funds/fund-in-focus/sli-uk-smaller-companies2

Chickereeeee

zagfles wrote: »

So is this fund 1% more expensive to buy at II or Fidelity than it is at HL?

The 'spread' is not the same as the 'initial charge', although the effect is similar. All three platforms (actually the fund rather than the platform) have the same spread, and all three have zero initial charge.

You just pay more for a fund unit than you can [FONT=&quot]immediately[/FONT] sell it for, on all three..

koru

zagfles wrote: »

This is confusing me. Take for instance Artemis Strategic Assets class I Acc. This currently has a sell price of 78.30 and buy 79.41, ie a 1.4% spread.

According to HL there is 1% initial charge which they refund.

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/a/artemis-strategic-assets-class-i-accumulation

According to Fidelity there is no initial charge but there is a buy/sell spread, and it doesn't look like they refund any of the "initial charge" in the spread. https://www.fidelity.co.uk/investor/funds/fund-supermarket.page#NAME|Artemis (sorry direct link didn't work but it's in the list on this link)

II say there is no initial fee as well but the show the same buy/sell prices http://www.iii.co.uk/investing/factsheet/F5A7

So is this fund 1% more expensive to buy at II or Fidelity than it is at HL?

This does seem to be a bit murky. About half of fund houses have no bid-offer spread across all their range, but some fund houses do seem to have a spread and, unlike initial charges, this doesn't seem to be rebated.

Fund houses with spreads seem to include Artemis, Black Rock, AXA, Rathbone, Jupiter, L&G, Liontrust, Psigma, some Aviva, some Baring, some Henderson, some Ignis, some Marlborough, some Neptune, most Old Mutual, some Schroder, some Threadneedle.

It looks like it is possible to have a bid-offer spread that arises for reasons other than an initial charge and I'm guessing this means no commission to the intermediary and so no rebate to the investor. That's quite costly, especially for investors who are buying and selling holdings. They may be losing 1.4% or more, each time they buy/sell.

Rollinghome

koru wrote: »

It looks like it is possible to have a bid-offer spread that arises for reasons other than an initial charge and I'm guessing this means no commission to the intermediary and so no rebate to the investor. That's quite costly, especially for investors who are buying and selling holdings. They may be losing 1.4% or more, each time they buy/sell.

Most (but not all) Unit Trusts have dual-pricing with spreads. Most OEICs (but not all) have single-pricing with no spreads. Some funds have a dilution levy which is something else again.

They are supposed to cover the cost to the fund of buying and selling assets to create units. Funds that don't have dual pricing still have trading costs but they aren't so obvious and investors who hold for the long term will pick up the costs of those who frequently buy and sell.