ii - selling part of a fund and buying other funds

7685

I have some cash, cash ISA and S&S ISA in my ii account.

I am looking to sell part of my OEIC S&S ISA fund and also looking to buy 3 - 4 fund with the sale of this S&S ISA.

I would like to know when I am selling this fund whether I can buy back more than one fund during the same transactions or do I have to wait till the first transaction (sell and buy one fund) completes and wait till the remaining S&S ISA is in my account then I can buy the other funds?

If I can I will select the 'amount (£) rather than the units? as I do not know the unit value as they are OEIC funds

Will it cause problems if I use my cash and cash ISA to buy other funds . I think I should be ok but want to check.

masonic

You do not need to wait until the sell order settles, the proceeds are usually available to reinvest as soon as the order is executed (when you get your contract note), but you need to be cautious where the settlement time for the sold asset is longer than the settlement time for any of the purchased assets. This can result in a negative balance in your account and ii have been known to complain about that. If all the funds are UK domiciled OEICs, then this should not happen.

You can do what you wish with the cash once it is available and can have multiple buy and/or sell orders on the go at the same time.

aroominyork

Just a detail on masonic's "you need to be cautious where the settlement time for the sold asset is longer than the settlement time for any of the purchased assets." The funds from the OEIC sale will usually show on your account the day after you sell them if it has a midday valuation point, so if you sell a T+3 fund and the following day buy a T+2 fund they will settle on the same day.

poseidon1

You can book all the sell / buy trades at the same time, but different OEICS are likely to have different settlement periods varying from T+3 to T+5.

What will happen is if the buy trades are dependent on the proceeds of the sale transaction, the buys will be held in pending until the sale proceeds materialise and then deployed across your various purchases at the next relevant valuation point. You therefore never know what price you bought at until after the event.

If you are also using available cash to make purchases, those will happen first but again not on the day you give the instruction and will be subject to the relevant T + settlement period for the particular OEIC concerned.

In this respect, buying and selling OEICs lack the transparency and immediacy of trading shares/ etfs.

https://www.ii.co.uk/analysis-commentary/dont-be-shy-ask-iihow-are-funds-priced-ii521803

masonic

I thought that settlement had become more standardised since 2021 within asset types, but could be mistaken.

What I do know is ii pre-fund buy orders when placed using unsettled funds and a contributor to this thread was once threatened with an interest charge in relation to this when there was a mismatch.

In the case of OEICs (and UTs), you never know the price you'll get when placing the order, so this is no different when buying using the proceeds of a sale. Only exchange traded investments allow a quote to be reviewed prior to order placement.

aroominyork

ii charged me interest when I mismatched, not realising my T+4 sale would not settle before my T+2 purchase. I had no complaint - caveat emptor (and caveat venditor).

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81969888#Comment_81969888

Yes you are correct there is an initiative to move to a standardised T+2 for UK unit trust funds ( the UK Accelerated Settlement Taskforce) with industry participants working toward a pre October 2027 deadline - see below

https://www.theia.org/news/press-releases/ia-pimfa-and-aima-issue-recommendation-t2-fund-settlement

https://www.fca.org.uk/news/statements/fca-welcomes-statement-supporting-faster-settlement-trades-funds#:~:text=For%20UK%20authorised%20funds%20and,early%20to%20deliver%20this%20transition.

I suspect that the investment in systems changes necessary to deliver this outcome, may see some fund houses go all the way to the wire in meeting the deadline.

EthicsGradient

https://forums.moneysavingexpert.com/discussion/comment/81969846#Comment_81969846

Ironically, ii have a tendency to slightly over-purchase OIECs, which can leave you with a slightly negative cash balance in an ISA. The first time this happened, it was about £80, I had already contributed the full amount for the tax year, and I ended up in a phone conversation with them, and we sold the excess of what they'd bought for me, without a charge. Then they did it again, just a single figure negative amount this time, so I ignored it. And they did it again last week - again, single figures, so I'm ignoring it - I will soon be contributing more, or, if I decide not to, will get a dividend in about a month's time that will cover it.

It's a little concerning that their system can't always get amounts of purchases right, but each time, it's been their screw-up, so I think we just have to live with it, and point out it's their fault if they bring it up.

7685

Appreciate all the posts - I should be prepared for the unexpected 'admin'.

I have applied for a SW (iWeb) over 12 months ago but not used it - if it is still open I was thinking to transfer my cash (from my bank account) over there and then buy the new OEIC funds as SW has no platform fees. As I will be making a one off lump sum for 7 funds. So £5 / trade will be better than £14.99 pcm on ii? I assume the fund's OCF and transactions fees will be the same as ii?

As all funds will be reinvested, would I have to pay a transactions fee to the funds as well as £5 /trade fee to Iweb?

PS I opted for ii for the phone support … I have not use any of their 'fancy tools' etc.

aroominyork

https://forums.moneysavingexpert.com/discussion/comment/81969933#Comment_81969933

I have a different experience with ii. If I am selling an OEIC in one account and re-buying in another, I get different prices so that the amount of my buy order is fully spent. Depending on how many decimal places the fund manager works to - between two and four - affects the price I buy at.

LHW99

Will it cause problems if I use my cash and cash ISA to buy other funds

My understanding is that you cannot buy funds within a cash ISA, you would have to transfer it to an S&S ISA first