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Investing in Property
Comments
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InvestInPoker wrote: »"BlackRock Global Property Secs Eq Tracker Fund Class H Acc"
Today it says Buy price 1.134 Sell Price 1.078 (ouch!)
Initial charges are listed as nothing, but of course you will get ripped for 5% right off the bat - which is greedy on their part and to be avoided.
It appears to be exactly the same fund as the D class, same holdings etc. The difference is in the bid spread. I don't believe this fund was soft closed as it got too big or for any other reason. I believe they just slapped that spread on it out of greed.
Being fair it is by far and away the best indirect property fund that I could find when I allocated a portion of my portfolio to it a few years ago. There does not seem to be any good competition for it hence the charges now to access. Hurts I cannot top it up now though, nor can I bed and isa it.
http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/b/blackrock-glbl-propty-secs.-eq.-tracker-class-h-accumulation
The way I'm reading it, the official bid offer spread is 5% because Blackrock who supply them the prices quote the prices including the 5% initial charge. But any reputable fund platform will have a deal with Blackrock where their customers won't pay that element of the charge because they are supplying Blackrock with so much business. So they discount the 5% fee down to 0%. So you don't suffer the spread because when you buy, it doesn't cost you 113 it costs you 107 or whatever.
I don't actually use this particular fund platform it is just one that came up quickly when googling your fund name.0 -
bowlhead99 wrote: »So you don't suffer the spread because when you buy
As I said in my other post, I did suffer the spread when I bought the D class, although it was small and acceptable.
I would fully expect to suffer the spread if I invested in the H class. It is listed for a reason.
I understand what you are saying about 5% initial fees being discounted. I do not believe that gets you out of paying the bid spread here.0 -
Based on how other funds are quoted on that platform, I do believe it gets you out of paying the spread because the spread comes from published prices but then your platform manager gets you out of paying most of the spread because he's such a great guy and has discounted your initial fee ... (... which will make you so happy that you'll be willing to pay a platform fee of close to half a percent annually, with that particular platform!)
Like I say, I don't use that platform, but a family member does and when I was looking at his investments he had one showing a big spread which included the initial fee which was going to be discounted so he didn't pay full bid.
Are you saying for a regular investor paying unrebated initial fees, their effective spread would be 10%? That would be pretty unusual for a mainstream fund manager like Blackrock on a popular product billed as a 'tracker'. Which is why I thought you were mistaken.
*edit:
I just looked it up on Trustnet.
There is a D class and an L class with small spread and no initial fee.
There is an H class and an A class with large spread and a 5% initial fee, where the large spread approximates to the small spread plus 5%.
So, I still think you're mistaken, if you find a platform that discounts the fee you effectively discount the spread.0 -
bowlhead99 wrote: »Are you saying for a regular investor paying unrebated initial fees, their effective spread would be 10%? That would be pretty unusual for a mainstream fund manager like Blackrock on a popular product billed as a 'tracker'. Which is why I thought you were mistaken.
What I am saying is you will suffer the bid spread on this regardless of anything else. It is not part of any initial fee discount or non discount. You cannot ever buy at the sell price. The initial fee and discount is a completely different thing.0 -
bowlhead99 wrote: »So, I still think you're mistaken, if you find a platform that discounts the fee you effectively discount the spread.
I think you are wrong and would be willing to make a charity bet to that effect. So you are suggesting if you bought £1000 worth of the H class on Hargreaves Lansdown you would have a holding worth £1000 to start of with? I think you would have the value of your holding listed as approx £950 to start off with.0 -
Yes I do (believe the actual spread would be a pittance once they've discounted the 5% which is attributable to 'initial fee') and would be happy to make a charity bet. Unfortunately I don't have an account with Hargreaves Lansdown. I just looked it up on TD Direct and Youinvest where I have spare money to put where my mouth is, but both of them only list the D class (i.e. the one you want!)
Actually Youinvest also carries the L class but that is another low spread version like the D so would not prove the point0 -
bowlhead99 wrote: »Yes I do (believe the actual spread would be a pittance once they've discounted the 5% which is attributable to 'initial fee') and would be happy to make a charity bet. Unfortunately I don't have an account with Hargreaves Lansdown. I just looked it up on TD Direct and Youinvest where I have spare money to put where my mouth is, but both of them only list the D class (i.e. the one you want!)
Thanks yeah, can we agree on £100 to the charity of the other persons choosing if we can somehow get proof? It has to be proof of which we are both satisfied. Usually I am really strict with this sort of thing but I cba with that here. It is only £100 and its for charity. I will trust you if you want to do it. Loser has to post receipt of donation.
I also agree it is hard to get proof that we are both satisfied with. A random poster on here who claims to have bought some of the H class at HL would not suffice for me, I will be quite strict with that as I am sure you will be.
Just to make it clear this is the defining postI think you are wrong and would be willing to make a charity bet to that effect. So you are suggesting if you bought £1000 worth of the H class on Hargreaves Lansdown you would have a holding worth £1000 to start of with? I think you would have the value of your holding listed as approx £950 to start off with.
Cheers0 -
Sure, works for me! Good luck!0
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bowlhead99 wrote: »Sure, works for me! Good luck!
Ok good
http://www.hl.co.uk/investment-services/fund-and-share-account/charges-and-interest-rates
Note here under charges on funds sections you are warned about bid spreads and that you might have to suffer from themNote: The investments you choose may have their own initial and annual charges and a bid offer spread
The initial 5% charge discount that you are referring to is an entirely seperate thing and is listed under "Dealing charges" - which is different from a bid offer spreadWe also offer up to a 5.5% saving on the initial charges made by the fund manager
They are seperate things and you will suffer this bid spread killer if you purchase the H class through Hargreaves Lansdown.0 -
The investments may indeed have their own bid offer spread which you may suffer. The bid offer spread quoted by Blackrock and repeated on HL and trustnet is, for the H and A classes, about 5% greater than it is on the D and L classes, because the bid price to subscribe to a new share is presumed to incorporate the initial fee to the manager, but you won't pay it if you use a platform where the fee has been effectively discounted to nil.0
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