Ongoing Charge

valiant24

I have a holding in VinaCapital Vietnam Opportunity Fund Ltd VOF.
Sippdeal shows me that: Ongoing Charge (2020) 1.72%
Yet also:

Costs and Charges

How Much Does it Cost?*

Based on investing GBP 10,000 in this fund over a 5 years period with an expected return of 5%. The investment would be worth GBP 10,385.02 and Total fees would be GBP 2,105.43, If no fees were charged the investment would be worth GBP 12,762.82, this means your growth rate would be 27.63%

Average breakdown of fees per year:

Fund %

Ongoing Cost 3.02

Performance Fee 1.11

Transaction Fee 0.03
Which is it then?   1.72%?   Or 3.02%?
Thanks
V

moneysavinghero

https://forums.moneysavingexpert.com/discussion/6234315/ongoing-charge-v-ongoing-cost
You were answered this about another fund back in January. I'm sure the same advice applies to this fund.

underground99

The 'how much does it cost' disclosure, which can be kinda rubbish as an extrapolation, has to follow certain rules; components of fund operations being put into KIDs which get calculated over time periods may need to be defined differently than in fact sheet OCF. 

When you buy an investment trust or similar investment company, you know what its cost profile is because you've read its financial statements and annual reports, you understand how its tiered management fee structure works and the performance criteria for paying incentive fees. You don't really need some automated 'estimation' that performance fees will continue at 1.1% a year if the fund is only making annualised returns of 5% a year, because that won't happen. And you can see from the last five annual reports that the management and admin expenses excluding the performance fee haven't been over 2%, let alone 3%.

It's misleading to think that you will lose a total of 3% a year because the discount to NAV will increase by a bit, just because the discount happened to increase over the period covered by the last financial year's accounts. Of course, you know the discount could increase, you know a performance fee could be charged, you know there might be higher transaction costs, you know the pound might appreciate in value compared to the accounting currency of USD or indeed against local Vietnamese currency, and you know what incremental costs you will pay for your fund platform to hold a £10k exchange-traded investment, if anything.

Generally, reading a mifid or priips -sanctioned disclosure sheet is not going leave you better informed, and when you're carrying out your due diligence to consider buying an investment trust it will usually be a waste of your time to ponder where the platform got their 'actual' or 'estimated' numbers when you can read the prospectus for the cost structure and the longform international financial reporting standards compliant financial statements for the actuals and make your own estimates.

valiant24

moneysavinghero said:

https://forums.moneysavingexpert.com/discussion/6234315/ongoing-charge-v-ongoing-cost
You were answered this about another fund back in January. I'm sure the same advice applies to this fund.

I completely forgot that.  Must be old age.

Thanks.