Annual Management Charges

dunstonh

They tend to slightly outperform a unit trust in a rising market.

And of course tend to suffer more when the markets fall back.

To ask an idiot question. I now have a unit trust ISA/PEP with HL. If I so wished, presumably I could switch in whole or in part to an investment trust if one catches my eye ?

HL would be expensive for investment trusts.

EdInvestor

wombat42 wrote: »

I now have a unit trust ISA/PEP with HL. If I so wished, presumably I could switch in whole or in part to an investment trust if one catches my eye ?

You can buy both types of trusts and shares within the H-L ISA/PEP.

cheerfulcat

wombat42 wrote: »

To ask an idiot question. I now have a unit trust ISA/PEP with HL. If I so wished, presumably I could switch in whole or in part to an investment trust if one catches my eye ?

You could but the investment trust will cost more to hold with HL as ITs don't pay commission.

EdInvestor

dipsomaniac wrote: »

i don't agree edinvestor. the charges are clearly documented in the terms and conditions.

Not so.Only explicit charges (eg those in the TER are documented) Implicit transaction charges such as stamp duty, bid offer spread, broker's commission are not.They can double the AMC, depending on how often the fund manager buys and sells shares within his fund. The more he trades, the more you pay.

More explanation of these hidden extra charges here, from page 14 onwards:

http://www.pensionscommission.org.uk/publications/2004/annrep/chapters/ch6.pdf

dipsomaniac

Not so.Only explicit charges (eg those in the TER are documented) Implicit transaction charges such as stamp duty, bid offer spread, broker's commission are not.They can double the AMC, depending on how often the fund manager buys and sells shares within his fund. The more he trades, the more you pay.

this has been gone over before. bid offer spread is clearly shown in the price. other charges are crucial to the running of the fund. most are there to protect the unit holder - auditor fees, trustees fees etc. stamp duty can't be avoided. you have to concede that the underlying assets that make up the porfolio need to be bought and sold. not every fee is listed but they are documented and consolidated as other expenses.

all the fees also have an impact on return, if the fund is consistantly returning +10% pa you make a decision to invest in the fund manager not the fees that you are paying. you only have the option of reducing the initial charge by shopping around, not any other fees.

More explanation of these hidden extra charges here, from page 14 onwards

they are not hidden you just don't list every single expense of the fund, small charges are consoditated and can be found in the terms and conditions or in the managers reports. you can also see what stocks have been bought and sold.