Blackrock UK Absolute Alpha

moneylover

meester wrote: »

The fund is a Unit Trust. These include the commission for financial advisers in their advertised sell price. If you buy from a discount broker, you will not actually pay this cost.

Most funds nowadays are OEICs. These have one price and the commission is added on top of that price when you buy.

The effect is exactly the same.

If you are buying the fund from a broker that discounts some of the initial commission, then you need to take that discount off the price to work out the actual selling cost.

E.g.

http://www.h-l.co.uk/fund_research/security_details/sedol/B11V7T6.hl

Sell: 116.2p
Buy 122.3p (INCLUDING THE INITIAL CHARGE/COMMISSION)
Initial charge: 5%
Initial Saving 5%
Fund Type: Unit Trust

This tells you that it is a unit trust, so the buy price quoted includes an initial charge of 5%. To find the actual buy price you take off the initial saving (of 5% in this case).

Hence 122.3p * 0.95 = 116.2p

So the buy/sell is the same.

So I simply pay 116.2p and nothing gets added on - the only cost to me will be the annual management charge?
So that would mean that if I buy from H-L a fund that has the same advertised buying and selling price I not only dont pay any buying costs but the fund will also give me an extra 5% of units?
eg this Invesco fund which is another fund that I am considering.

purch

you have a £10 margin call you'd rather have £10,000 to cover it than only £10!

I wouldn't.....my margin account always has the bare minimum in it

If the Blackrock fund is being run that way then it basically does have a large balance sitting as cash, doing very little (other than losing 'real' value day by day)

meester

moneylover wrote: »

So I simply pay 116.2p and nothing gets added on - the only cost to me will be the annual management charge?
So that would mean that if I buy from H-L a fund that has the same advertised buying and selling price I not only dont pay any buying costs but the fund will also give me an extra 5% of units?
eg this Invesco fund which is another fund that I am considering.

No!

For OEICs the charge is added onto the quoted price. If you are paying any initial charge above 0, then you will pay MORE than the quoted price. If there is no charge than you just pay the quoted price (as in this case).

For Unit Trust the charge is included in the quoted price. Hence if you are getting the charge discounted, you pay LESS than the quoted sell price.

moneylover

meester wrote: »

No!

For OEICs the charge is added onto the quoted price. If you are paying any initial charge above 0, then you will pay MORE than the quoted price. If there is no charge than you just pay the quoted price (as in this case).

For Unit Trust the charge is included in the quoted price. Hence if you are getting the charge discounted, you pay LESS than the quoted sell price.

Thanks to one and all! I am clear in my head now how to read the sell/buy prices - thank goodness!

lush1001

hi im new to this and have been reading through some of these threads- i want to up my savings and eventually (probably some years from now) afford a deposit for a house and loads of stuff! Gonna start filling up my ISA this year- out of interest when you have reached your ISA limit where is the next best place to save your money or is it just an ISA???

lush1001

ooooooooppppp wrong thread!! sorry