Costs and Charges Statement 2.93%?

Davina40

x-o have produced a costs and charges statement. I've not had one before I think this is due to MiFID II.

It's telling me that for the year to December 2018, the product charges were £871.05 or 2.93%. This is made up of £585.90 ongoing costs, £95.93 transaction costs, and £189.62 incidental costs.

My holdings are currently:

Edinburgh Worldwide IT 12.8k
Empiric Student Properties 6.1k
Schroder Asian Total Return 11.8k

The x-o statement doesn't break down the charge by fund.

2.93% sounds high to me. Is it?

dunstonh

2.93% sounds high to me. Is it?

Not for the funds you have, no.

Transaction costs you can largely ignore. They have to be disclosed but they are flawed (part of them includes an element of profit and loss for example). Property funds and specialist/niche funds will tend to have higher transaction charges.
Incidental costs for most people are going to be zero. However, if you utilise non-mainstream or niche/specialist funds, you are going to see figures in that column.

You have no control over TC or IC. The MIFIDII disclosure on these is often more damaging than helpful if you dont understand what you are investing in.

So, in the context of your holdings, it is right.

EthicsGradient

I got a charges statement from Aberdeen Standard for an investment trust that I hold directly with them, and it had a very high ongoing charge too - over 2% (which is the bulk of your costs). On another money forum I asked if anyone knew how it happened, and we came to the conclusion it is probably 'borrowing costs' - which, yes, may be because of MiFID II. 'Ongoing' seems to have 2 different definitions now:

...they often give the ongoing charge figure, which omits transaction costs, performance fees and borrowing charges which are shown in the KID. In one example, total charges in the PRIIPs KID equated to around 3% per annum but the only costs given in the factsheet was the 1.2% annual management charge (AMC)

(from an FCA document - as a newbie, this forum doesn't allow me to post links. Or search for an article about ITs from Money Marketing saying "charges in the new Key Information Documents under the recently-launched Priips regulation must include the cost of borrowings, which are not included in the traditional ongoing charges methodology"

So if your fund(s) are borrowing (the Edinburgh IT could be, anyway), that could be showing up as a 'cost'.

Davina40

Thanks for the replies.

It would have been good to get a statement with a breakdown per fund, as it is it's not very informative/helpful. Maybe this is an x-o thing they are no frills after all. Do other brokers send these statements with a breakdown by fund?

Prism

Davina40 wrote: »

Thanks for the replies.

It would have been good to get a statement with a breakdown per fund, as it is it's not very informative/helpful. Maybe this is an x-o thing they are no frills after all. Do other brokers send these statements with a breakdown by fund?

Youinvest can create a Morningstar X-Ray on demand which includes a breakdown of the charge per fund and an aggregate total. However its not accurate as it reports one of my funds have having no charge (when it does). Roughly 0.9% for me

dunstonh

Davina40 wrote: »

Thanks for the replies.

It would have been good to get a statement with a breakdown per fund, as it is it's not very informative/helpful. Maybe this is an x-o thing they are no frills after all. Do other brokers send these statements with a breakdown by fund?

All the platforms I have seen show it by fund and give a total. So, maybe it is an x-o thing.

Linton

Prism wrote: »

Youinvest can create a Morningstar X-Ray on demand which includes a breakdown of the charge per fund and an aggregate total. However its not accurate as it reports one of my funds have having no charge (when it does). Roughly 0.9% for me

The morningstar data is the old OCF. I think the OPs confusion comes from the new MIFID II data. Also one of the OPs funds holds physical property. Clearly the cost of managing property are a lot higher than the costs of looking after a set of share holdings.

Reluctantpensioner

Did I understand Trustnet right?
Edinburgh Worldwide IT:
as well as 0.81% OCF
there is an additional management charge of 0.8% per quarter
plus a performance-related management fee paid annually.

Also congrats on the highest risk factor I have ever seen: 232.
Heady stuff.