Confusion of open ended fund categories

cepheus

Do we have to buy the 'inclusive units' to take advantage of the recent reductions in charges from open ended funds? It is all too easy to buy the old ones!

There is an article in TIM about this

Linton

Oeics and unit trusts come in a variety of classes with different charges. The classes are normally named by single letters. So Class A is normally the old standard units with full bundled charging. If you look at individual funds on https://www.trustnet.com you will get the picture. Unfortunately there is no standard naming convention. Each platform website will list the classes they sell. You will need trustnet to tell you if cheaper classes are available.

cepheus

HL tell me the unbundled ones with the 0.75% management fee have the old terminology, and the older structure with the bonus are called 'inclusive'. Really confusing.

grizzly1911

Cavendishonline only sell the unbundled funds now, where they are available, in their range.

Rollinghome

cepheus wrote: »

Do we have to buy the 'inclusive units' to take advantage of the recent reductions in charges from open ended funds? It is all too easy to buy the old ones!

Will be (slightly) less confusing soon. From 6 April 2014, due to RDR, you won't be able to make any further investment in the old bundled classes.

grizzly1911 wrote: »

Cavendishonline only sell the unbundled funds now, where they are available, in their range.

Cavendish (via Fundsnetwork) still allow you to keep all your old bundled funds on the original basis with full rebate of trail and no additional platform fee - so may be worth keeping them in some cases until all funds have to be converted in April 2016. (Rebates are taxable outside of an ISA)

HL are charging their 0.45% platform fee even on old bundled funds but it most cases still retaining some (or all) of the commission - so likely to be beneficial to switch or convert in almost every case.

Masomnia

It is confusing. Halifax have automatically converted some funds we've got, I don't know if that's common.

Porcupine

Eventually everything will be converted, but that will take about 2 years. Some brokers are doing it more proactively than others - I think Halifax/iWeb are mostly clean now, while you can ask HL now to convert but it won't happen until June.

In some cases clean units end up being more expensive than inclusive units once you add in the platform fee, so it's not always cheaper to convert. That's mostly passive funds but there are a few active too (that formerly paid trail but have taken the opportunity to jack up their prices).