What is Z class (specifically Invesco Perp Dist)?

deadpeasant

On HL I held Invesco Perpetual Distribution Inc Acc, and I'm thinking of going for the same thing on iWeb, but iWeb offers
IP Distribution Z Acc NAV
IP Distribution Z Gross Acc NAV

Can someone explain the differences please? Googling suggests that Z class is for employees, but I don't see how that can be the case here. Also, what exactly does the 'Gross' option mean? (I understand that IP Dist pays interest rather than a dividend, so there's some tax benefit in an ISA. Is the 'Gross' related to that?)

Reaper

these shares do not pay commission to financial advisers. The X, Y and Z share classes are only available to investors who satisfy certain criteria such as nominees and fund platforms which have a written agreement in place with us to buy the relevant share classes.

That's an extract from here:
http://www.invescoperpetual.co.uk/portal/site/ip/contentDetail?contentId=b20e6942c136d310VgnVCM100000c1f1bf0aRCRD

There is also an explanation about Gross on the same page.

xylophone

I hold IP Z Gross Inc within my II ISA. It does not pay commission.

I used to hold IP Gross Acc within my HL ISA. It did pay commission.

Chickereeeee

Gross shares: "Investors must be eligible for gross interest distributions and invest a minimum of £1 million"....?

xylophone

invest a minimum of £1 million"....?

I don't... but the brokers in total do?

deadpeasant

The HL charts show Gross outperforming vanilla by 10% over 5 years (non-Z classes; I think Z was introduced recently).

I found this from Fidelity
https://www.fidelity.co.uk/investor/help/forms-literature/forms/gross-share-class-fund.page

Gross share class – eligibility form
These funds pay interest distributions without the deduction of income tax. Please note if you are using a tax wrapper ISA or SIPP then you do not need to complete this form.

Would non-deduction of income tax from interest distributions add up to 10% higher performance in 5 years? (I'm basic-rate. Do HL charts assume higher-rate?)

PS For non-Gross fund classes, can I assume that the tax on interest distributions in an ISA would be recovered by the broker/platform? Or do forms have to be filled in to get it back?

Linton

deadpeasant wrote: »

The HL charts show Gross outperforming vanilla by 10% over 5 years (non-Z classes; I think Z was introduced recently).

I found this from Fidelity
https://www.fidelity.co.uk/investor/help/forms-literature/forms/gross-share-class-fund.page


Would non-deduction of income tax from interest distributions add up to 10% higher performance in 5 years? (I'm basic-rate. Do HL charts assume higher-rate?)

PS For non-Gross fund classes, can I assume that the tax on interest distributions in an ISA would be recovered by the broker/platform? Or do forms have to be filled in to get it back?

By default interest payers like banks and bond funds pass standard rate tax onto HMRC. For a bond fund in an ISA you get standard rate tax returned to the ISA account as cash a small number of weeks after the interest is paid. The platform does it all, you dont need to do anything.

Linton

The only difference between the different classes arises from the different amounts of money retained in the fund either because of different charges or different tax payments. The underlying performance of each fund/class is exactly the same.

xylophone

Before I held the gross version in HL, ( I held IP Distribution Acc) the tax refunds were claimed by HL and appeared once a month.

The gross version is paid gross so no tax refund.

Chickereeeee

xylophone wrote: »

I don't... but the brokers in total do?

That would apply to pretty much any fund.

xylophone

That would apply to pretty much any fund.

It may well do. I held IP (net) for years but it occurred to me that there should be no reason why the gross version should not be held in an ISA.

I looked up the information and found out about the gross class ( and the £1m qualification) and made a specific enquiry of HL on the basis that although I was a pound or two short, (:rotfl:) the total held by them as nominees would meet the case.

I was told that I could hold the gross fund but that I would not be able to deal in it on line - this did not worry me as I wanted the fund as a core holding and traded at most monthly.

It was the "dirty" fund that moved to II but as I wanted the clean, I enquired as to which clean class they would offer and was told the "Z".

The rest is history.....