What are Foreign Exchange fees?

MetaPhysical

Hi,
Looking to open a SIPP and doing some reading.  I come across Foreign Exchange fees.  What are these please?  If fund X holds shares in the US as part of the fund, do I have to pay the FX fees when I sell/buy some of the fund?  Surely that's part of the trade fee?

I'm very clearly missing something here.

Marcon

See https://www.ajbell.co.uk/our-services/international-dealing for more info and charges (which will vary from one SIPP provider to another)

tacpot12

The bit you are missing is whether the fund is denominated in GBP or some other currency. Most retail funds are denominated in GBP, so there are no foreign exchange fees when you buy or sell. If the fund holds shares that are denominated in other currencies, then the foreign exchange fees are paid by the fund, not the investor. 

dunstonh

 If fund X holds shares in the US as part of the fund, do I have to pay the FX fees when I sell/buy some of the fund?  Surely that's part of the trade fee?

Remind yourself what currency those US shares will be in.     And then what currency your SIPP is going to be in.

MetaPhysical

Ok, thank you all.
So, for example, if I were to directly buy Apple shares from my platform that are obviously in $$$ then the foreign exchange fee applies there or in similar ?

poseidon1

MetaPhysical said:

Ok, thank you all.
So, for example, if I were to directly buy Apple shares from my platform that are obviously in $$$ then the foreign exchange fee applies there or in similar ?

 The A J Bell link provided by Marcon clearly  explains the position.

Incidentally judging from your previous posts regarding your managed Avivia pension, jumping into individual foreign share holdings via your new SIPP seems quite a  ( risky) departure from your current investment approach.

 Most of the forum contributors here would assert that investing in individual shares  rather than managed funds/ unit trusts is pretty high up the risk scale and requires considerably more hands on monitoring.

MetaPhysical

poseidon1 said:

MetaPhysical said:

Ok, thank you all.
So, for example, if I were to directly buy Apple shares from my platform that are obviously in $$$ then the foreign exchange fee applies there or in similar ?

 The A J Bell link provided by Marcon clearly  explains the position.

Incidentally judging from your previous posts regarding your managed Avivia pension, jumping into individual foreign share holdings via your new SIPP seems quite a  ( risky) departure from your current investment approach.

 Most of the forum contributors here would assert that investing in individual shares  rather than managed funds/ unit trusts is pretty high up the risk scale and requires considerably more hands on monitoring.

Hi, thank you for your concerns but no, I am not going into individual shares, just going to go for global tracker ETF's and global index tracker funds. The reason for my post was the context of the FX and I used a US share to help me illustrate.  I have absolutely no intention to be share picking - I have neither the knowledge nor the inclination.  "A wise man knows his limitations", as Dirty Harry once said.

poseidon1

MetaPhysical said:

poseidon1 said:

MetaPhysical said:

Ok, thank you all.
So, for example, if I were to directly buy Apple shares from my platform that are obviously in $$$ then the foreign exchange fee applies there or in similar ?

 The A J Bell link provided by Marcon clearly  explains the position.

Incidentally judging from your previous posts regarding your managed Avivia pension, jumping into individual foreign share holdings via your new SIPP seems quite a  ( risky) departure from your current investment approach.

 Most of the forum contributors here would assert that investing in individual shares  rather than managed funds/ unit trusts is pretty high up the risk scale and requires considerably more hands on monitoring.

Hi, thank you for your concerns but no, I am not going into individual shares, just going to go for global tracker ETF's and global index tracker funds. The reason for my post was the context of the FX and I used a US share to help me illustrate.  I have absolutely no intention to be share picking - I have neither the knowledge nor the inclination.  "A wise man knows his limitations", as Dirty Harry once said.

Fair enough.

Since America dominates the ETF space, you may well  have to contend with some FX fees depending on your selections. Good luck with self managing your SIPP!