HL Conversion options?

HardCoreProgrammer

>> Remember that loyalty bonuses are currently considered by hmrc to be taxable
If this is the case, does it make sense to convert even if the charges are the same? I notice that for the new funds, "HL annual saving on annual charge" tends to be lower than the old funds, so perhaps it is the loyalty bonus they are talking about?

redbuzzard

I wouldn't be surprised if HL's call centre is in meltdown tomorrow. They'll certainly get a call from me.

I have started to evaluate the change.

On the first four funds in my SIPP, without switching funds the change in net ongoing charges will be
+0.6% (owing to REMOVAL of loyalty bonus on Ruffer Equity & General),
+0.45% (loyalty bonus continues at zero on Ruffer Total Return),
-0.05% (extra 0.5% loyalty bonus on Henderson Cautious),
+0.35% less £24 (0.1% loyalty on HSBC American Index).

By switching to 'unbundled' fund classes, I can improve that, but I will still be worse off on the two Ruffer funds and the index fund unless I have missed something. And of course fund switching will potentially mean selling one day and buying the next, which Sod's Law says I will lose on, unless there are special arrangements for this.

It's not looking good.

masonic

redbuzzard wrote: »

And of course fund switching will potentially mean selling one day and buying the next, which Sod's Law says I will lose on, unless there are special arrangements for this.

If you convert them you won't be out of the market at all... but it looks like conversions will not take place until June.

koru

redbuzzard wrote: »

By switching to 'unbundled' fund classes, I can improve that, but I will still be worse off on the two Ruffer funds and the index fund unless I have missed something. And of course fund switching will potentially mean selling one day and buying the next, which Sod's Law says I will lose on, unless there are special arrangements for this.

I believe HL will be converting, so you won't be out of the market. Nor will you lose out from bid-offer spreads and dilution levies. But I'd check this with HL.

Rollinghome

redbuzzard wrote: »

I wouldn't be surprised if HL's call centre is in meltdown tomorrow. They'll certainly get a call from me.

I have started to evaluate the change.

On the first four funds in my SIPP, without switching funds the change in net ongoing charges will be
+0.6% (owing to REMOVAL of loyalty bonus on Ruffer Equity & General),
+0.45% (loyalty bonus continues at zero on Ruffer Total Return),
-0.05% (extra 0.5% loyalty bonus on Henderson Cautious),
+0.35% less £24 (0.1% loyalty on HSBC American Index).

By switching to 'unbundled' fund classes, I can improve that, but I will still be worse off on the two Ruffer funds and the index fund unless I have missed something. And of course fund switching will potentially mean selling one day and buying the next, which Sod's Law says I will lose on, unless there are special arrangements for this.

It's not looking good.

Just zapped my post about the Ruffer funds as I hadn't noticed yours.

As you say, for all the unbundled Ruffer funds I looked at they're putting 0.45% platform on top of the current 1.50% AMC but without rebating any of the commission. If you switch to clean the new AMC will be a massive 1.20% with the 0.45% platform on top and there's an initial charge remaining of 0.50%.

They made clear to shareholders that it's by not refunding all commission on bundled funds that they'll help retain their margins. The final deadline to prevent them doing that doesn't come in till April 2016. Very naughty.