Spread difference?

ColdIron

sevenhills said:

Thrugelmir said:

There's a 5% initial charge levied. 

But HL don't mention a charge, just 0.45% annually.

That is the charge

sevenhills said:

DireEmblem said:

Doesn't seem to be any initial charge here, so you'll probably just have their 0.45% platform fee.

I made the transaction yesterday and it's gone through today. The fund, Janus Henderson Asia Pacific Capital Growth is £6.11 up, with no costs or spread shown.

Not sure where HL make their money from, maybe they get some sort of commission from JH?

Commission is no longer allowed. They make their money from the 0.45% charge above

sevenhills said:

DireEmblem said:

Have you managed to sign up to HL without having to pay their platform fee of 0.45%?  That is now they make money on funds.

But they make that on my SIPP and then dealing/spread charges on top?

They make that charge from SIPPs, ISAs and GIAs. There is no charge for dealing funds at HL. HL do not benefit from from spread differences (of which there are none on that fund anyway)

https://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

jamesd

Thrugelmir said:

There's a 5% initial charge levied. 

Thrugelmir said:

DireEmblem said:

sevenhills said:

I have just been looking at Aberdeen Standard SICAV I Japanese Smaller Cos Class R2 - Accumulation (GBP), HL states that there is no charge for buying funds, there is also no spread.

How does HL make their profit and if there is no cost involved in buying and selling, is it ok to do it more often?

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/a/aberdeen-standard-sicav-i-japanese-smaller-cos-accumulation

Doesn't seem to be any initial charge here, so you'll probably just have their 0.45% platform fee.

I've found errors on HL's web pages previously. The information being provided by a third party. 

https://markets.ft.com/data/funds/tearsheet/summary?s=lu0278933410:gbp

https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000000EAM

Both these sources disclose a 5% initial charge. 

HL: ABERDEEN STANDARD SICAV I JAPANESE SMALLER COS CLASS R2 - ACCUMULATION (GBP)
FT: Aberdeen Standard SICAV I - Japanese Smaller Companies Fund A ...
Morningstar: Aberdeen Standard SICAV I - Japanese Smaller Companies Fund A Acc GBP

Both of those you linked to are the A class units. The HL one being referred to is the R2 class. HL is accurate about R2, you're not.

There is no initial charge on the R2 unit class at HL.

jamesd

sevenhills said:

I have just been looking at Aberdeen Standard SICAV I Japanese Smaller Cos Class R2 - Accumulation (GBP), HL states that there is no charge for buying funds, there is also no spread.

How does HL make their profit and if there is no cost involved in buying and selling, is it ok to do it more often?

They make money from the 0.45% platform charge and from their buying and selling services that are charged, as well as on the investor uninvested cash that they hold.

For many years now platforms have been prohibited from taking commission and required to refund to investors any they get. There are still so-called "inclusive" units of funds available at HL for those who held them before the change but they aren't offered to new buyers and commission is refunded. Before the change the inclusive funds had no platform charge because HL was being paid by the fund manager which has a higher annual charge percentage for this fund class. The modern replacements are called clean or super-clean. Even before the change it was normal for platforms to refund the whole initial charge so that in practice it wasn't paid even if the fund had it.

Buy and sell whenever it makes sense for you.

There is a sort of bid-offer spread for this type of fund, called a window. Each day the fund adjusts its price slightly based on the balance between buyers and sellers. If you were to by when buyers dominated and sell when sellers dominated you'd get a little bit of extra capital loss due to the fund moving within its pricing window. The window is used so that those who are actually buying and selling pay the costs to the fund of creating or destroying units by buying and selling the underlying shares.

Older unit trusts had something called "bid basis" and "offer basis" which had a similar effect and purpose. You may still find this in property funds which can have very large transaction costs or large lost profits if forced to sell at bad times.

sevenhills

I tried to click on the 'sell' icon today for my Janus Henderson unit trust, I just did it to view any dealing costs.

It would not allow me to sell, I assume the reason was that I only bought it 5 days ago.

jamesd

May be available after noon today. There's normally three day settlement time for funds and some have limited dealing days. Settlement is the time between carrying out a deal and the final transfer of ownership and money. Weekends and national holidays don't count.

DireEmblem

Thrugelmir said:

DireEmblem said:

sevenhills said:

I have just been looking at Aberdeen Standard SICAV I Japanese Smaller Cos Class R2 - Accumulation (GBP), HL states that there is no charge for buying funds, there is also no spread.

How does HL make their profit and if there is no cost involved in buying and selling, is it ok to do it more often?

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/a/aberdeen-standard-sicav-i-japanese-smaller-cos-accumulation

Doesn't seem to be any initial charge here, so you'll probably just have their 0.45% platform fee.

I've found errors on HL's web pages previously. The information being provided by a third party. 

https://markets.ft.com/data/funds/tearsheet/summary?s=lu0278933410:gbp

https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000000EAM

Both these sources disclose a 5% initial charge. 

Yeah *I think* the other sources are 'up to', and HL disclose what would currently be charged through their platform.

jamesd

The others aren't up to, they are the exact charges but for a different version of the fund, one that does have an initial charge. All the post did was demonstrate that there's more than one version of the fund and that it's possible for that to cause confusion.

maxsteam

sevenhills said:

I have just tried to find out how the different platforms compare. I looked at Hargreaves Lansdown and the price to buy Capita was 33.7, the price to sell was 33.81 to sell. That is now, when the markets are closed.

What is the buy price for the 'free' share traders?

How much does Interactive Investor, the free trading service, say is the price to buy Capita?

This should be an interesting exercise however, in my opinion, it should be done when the markets are open. Some platforms trade outside market hours when the spreads are larger. Here's a current screenshot from one platform...



This particular platform is competitive with their pricing but this quote is for after-hours trading. It's possible that, if I place an order now, after midnight, it will be executed but I am not going to try it at those prices! Another platform puts a "-" next to the prices outside trading hours. It's not unusual, at the start of the trading day, for spreads to start wide and then to narrow during the first few minutes of the trading day until buyers and sellers enter the market.

One day I will find time to post some numbers from a few platforms that can be compared. I will do that during the trading day and I will give the spread as a percentage. In theory, the spreads should be the same across all platforms but in practice this does not always happen, particularly if a platform is pretending that their particular product is different to the product offered on the main market. For example, IG offers index options where the index has a slightly different name and the expiry time is slightly different to the options offered on the main financial markets. IG's spread is often about 5 times what would be paid if using a broker to deal through the relevant stock exchange.

Last time I looked at Freetrade, they did not even admit that there was a difference between buying and selling prices, let alone declare what that difference was.

maxsteam

Just to follow up the initial idea of this thread, I am currently logged in to multiple platforms. When I search for Capita on one, I get a list of dozens of companies with "Capital" in their name. I've looked at ITV instead, simply because it's easier to find

Platform          bid  / offer      time

Fineco        118.40/118.45   15:12
AJBell         118.45/118.50   15:12
I-O(Jarvis)   118.70/118.75   15:20
HL               118.70/118.75   15:22
Degiro         118.65/118.70   15:23
Freetrade    119.00 (just one "indicative" price) 15:23
IG                118.40/118.56   15:26

All very similar with a spread of 0.05p, although it has widened occasionally to 0.1p on most platforms, except the last two. I don't hold ITV shares on Freetrade so, if I traded, I would be buying and the "indicative" price is slightly worse than other platforms and their price has not changed in the last 20 minutes. IG's spread is wider than the others, at 0.16p (occasionally narrowing to 0.1p).

This is just from a few minutes observing the platforms during the trading day.

DireEmblem

maxsteam said:

This is just from a few minutes observing the platforms during the trading day.

Thanks for this - I guess we really need an indicative quote - some brokers simply pay for data feeds, so the price/spread history they are showing may not be 'complete' or what you could get with them when you go to place your trade.