Fees for income funds

dont_use_vistaprint

Thinking of investing in Franklin Income USD fund via HSBC. They have been very helpful matching my objectives and setting up the platform and USD account. But the one off fee of 3% seems high & I know they are not competive on Forex too.

I don’t want to be one of those people that plays with all the gadgets in an electrical store then finds the cheapest place online!

is 3 % reasonable , a bit high or very uncompetitive ?

Theres  no other fees and I’m planning on keeping it 7-10 years for monthly income 

jimjames

That sounds very high. How does it fit in with the rest of your portfolio, it's not really a fund to hold in isolation?

ColdIron

Do you have a link to the fund?

Is that an advice fee or an initial fee levied by the fund?

dont_use_vistaprint

I already have black rock emerging markets and Franklin opportunities but they are monthly regular for capital appreciation, this is lump sun for income so the 3% is meant to be getter ? and I have pensions and various max protected savings accounts.

Where else can I invest in this fund for a more competitive rate ?

dont_use_vistaprint

ColdIron said:

Do you have a link to the fund?

Is that an advice fee or an initial fee levied by the fund?

https://www.franklintempleton.co.uk/our-funds/price-and-performance/products/4909/A/franklin-income-fund/LU0098860793

I don’t know the answer - it’s the fee that HSBC charge me , and it’s the only fee there is for the life of the investment . They will budge to 2.25 if I go over 100K and buy extra units with the .75 

Eyeful

I have no knowledge of this fund but following your link, I pulled out the
"Key Investor Information" sheet (see below)

https://www.franklintempleton.co.uk/download/en-gb/kiid/0fa5f57d-954d-4f05-8d0b-400a732b1e8f/KIID_LU0098860793_en_GB.pdf

For the year ending 31 December 2022 the above document states:-
There is a one off charge 5.75% taken off before or after your money is invested.
Annual On going charge of 1.67%

Could these high charges be behind why they are so helpful to you?

EthicsGradient

Are you sure that's the "Franklin Income Fund" that you're looking for? I ask because the Franklin Income Fund that is available to Americans has similar goals, but currently has different weighting of investments. See Franklin Income Fund - Class A1 - FKINX (franklintempleton.com) for that; as an example, the Luxembourg-based one was, at 31st May, 6.02% US Treasury Notes/Bonds, while the American one was 12.8%. Note that the American one has "Maximum Initial Charge 3.75%", "Net Expense Ratio 0.62%".

dont_use_vistaprint

Eyeful said:

I have no knowledge of this fund but following your link, I pulled out the
"Key Investor Information" sheet (see below)

https://www.franklintempleton.co.uk/download/en-gb/kiid/0fa5f57d-954d-4f05-8d0b-400a732b1e8f/KIID_LU0098860793_en_GB.pdf

For the year ending 31 December 2022 the above document states:-
There is a one off charge 5.75% taken off before or after your money is invested.
Annual On going charge of 1.67%

Could these high charges be behind why they are so helpful to you?

Im not sure but I clarified - the 8.12% is after all internal fund costs and fees, the only fees payable for life is one off is 3% of the sum invested 

Eyeful

Where did the 8.12% you have just mentioned arise?

I was just pointing out that I followed that link you posted as being the income fund you intended to invest in. Once there I clicked on the documents section which led to the Regulatory Documents section. From this I extracted the KIID document, which the company themselves say you should read before making a final decision. 

The KIID clearly states that for the year ending 31 December 2022.
You will pay a one off charge of 5.75%.
That the this fund has an annual on going charge of 1.67% (at present).

To me these are both high charges to pay someone for being very helpful.

I have no idea if you had read the KIID, or if these charges had been pointed out to you. That is why I included all these in that first post.   

JohnWinder

the only fees payable for life is one off is 3% of the sum invested …..

‘it’s the fee that HSBC charge me , and it’s the only fee there is for the life of the investment 

The only fee payable to whom? If the answer is HSBC, are there any other fees payable to anyone                                                                                                                                                                                        else for the life of the fund?      
If there are none, buy some for me too, although I have strong doubts about the managers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

masonic

This thread is seriously confusing, but it bears mentioning that any "initial charge" in the fund's literature is likely to be heavily discounted, usually to 0% at most popular fund supermarkets, while the OCF/TER figure is the one to look out for and is an annual charge. The platform fee (0.25% taken quarterly at HSBC - does this mean 1% per year?) should be added on.

This looks like an eye-wateringly expensive choice of fund and platform to me. It's also unclear why you would want to invest in an offshore fund when there are better and cheaper UK-domiciled alternatives without the forex headache.

It also doesn't look from here as if the fund being discussed is carried: https://www.hsbc.co.uk/investments/products/global-investment-centre/funds/

Perhaps you are using a different HSBC advisory or offshore service?