KID

ANGLICANPAT

Evening. Please can someone tell me  what  charge is being referred to   in the following   quote.  I know KID means  Key information Document  

  "Premium to net assets: 2.0% as of 22 Mar 2021; Costs: 1.0% OCF, 1.04% KID "

EthicsGradient

I don't know if this still applies, but KIDs used to have to count the interest paid on any long-term borrowing of an investment trust as a cost (which ITs weren't happy about, because they would say their borrowing normally ends up as a net gain for the trust, if they do it right). So perhaps this is saying that the costs are 1.0% if calculated without borrowing costs, and 1.04% with them.

See eg https://www.ftadviser.com/investments/2018/02/27/gearing-disclosures-double-trust-charges/

underground99

ANGLICANPAT said:

Evening. Please can someone tell me  what  charge is being referred to   in the following   quote.  I know KID means  Key information Document  

  "Premium to net assets: 2.0% as of 22 Mar 2021; Costs: 1.0% OCF, 1.04% KID "

Some charges that are not part of the OCF projection are caught on the KID which uses historic cost experience. The KID disclosure includes finance and borrowing costs, performance fees, transaction costs among other things. If you get the investment trust's annual accounts you can see what they're spending their money on from the income statement and supporting notes and come up with your own expectation.

In this case the KID figure, which will include all the major OCF items, is only 0.04% higher than OCF (a difference of one twenty-fifth of the OCF) - not really significant.