Quick Q regarding fund initial charges

alastairadb10

Hi,

I have been investing in funds for a few years through Hargreaves Lansdown, SIPP and ISA. In general initial charges are removed via discounts however there are a few funds which have initial charges that Im interested in. Is this charge imposed EVERY time units are bought in this fund? ie not just the first time.

e.g. Invest £1000 in fund at £1 per unit, 2% initial charge. Would I actually get 980units? THEN After the first payment does the initial charge still apply?

Thanks
Alastair

dunstonh

Is this charge imposed EVERY time units are bought in this fund?

Yes. (....need 10 chars )

alastairadb10

Thanks dunstonh

What does "need 10 chars" mean?
Ta
Alastair

jem16

alastairadb10 wrote: »

Thanks dunstonh

What does "need 10 chars" mean?
Ta
Alastair

It means that the board will not allow posts which are less than 10 characters long. Hence the need to add extra meaningless words.

Bumbling_Amateur

So, to take as an example the Invesco Perpetual Global Bond Fund, through an HL SIPP.

http://www.h-l.co.uk/funds/fund_key_features/sedol/3302866

Initial charge 5.00% Initial saving 5.00%
Annual charge 1.00% Annual saving 0.150%
Total expense 1.19%

Why charge an initial charge of 5% AND an initial saving of 5%. Isn't that just the same as saying there is no initial charge? And given the above figures isn't the total expense 1.00 - 0.150 = 0.850%? Where does 1.19% come from ?

Lokolo

Yes there is no initial charge. No idea why they don't just say 0% charge.

No idea about the other thing.

Richard_DandR

http://investor.invescoperpetual.co.uk/UK/onshoreliterature/simplified_prospectuses/GlobalBond.pdf


What are the fees and expenses for the Fund?
The only charges paid directly by investors are:
Initial (sales) charge: 5%
Annual management charge: 1%
The Total Expense Ratios (TERs) for the Fund
are: 1.19%* (average over the 12 months
ending 30 April 2007 – used to calculate the
effect of charges table below) and 1.19% (as
at 31 December 2007). The TER shows the
annual operating expenses of the scheme
expressed as a percentage of average net
assets – it does not include initial charges or
transaction expenses. All European funds
highlight the TER to help you compare the
annual operating expenses of different
schemes. The TER includes the annual
management charge and also the following
charges which are deducted directly from
the Fund: Registration Fee, Depositary Fee,
Custody Fee, Audit Fee, FSA Fee, Price
Publication Fee and Report production,
less: VAT recoverable where applicable.
* Annual TER and PTR figures are
displayed on our website.

Not sure why the reference dates are 2007 (misprint?) but the text explains the calculation and the nature of the expenses.

Bumbling_Amateur

Thanks Lokolo and thanks to Richard DandR also for the link.

I can now see that buying this fund through HL will cost nothing in initial charges, but there is an annual charge of 1% plus 'other' charges which total 1.19% pa.

More confusion on the HL website as to buy £1000 of the fund to put in a SIPP there are two prices given: 'accumulation units' for 90p or 'income units' for 60p. What's the difference?

Now if buying into the fund to the tune of £1000 today and then move out of that fund in 6 months, how much of the charges are due? Pro rata so I'd pay 50%? Or do they take the lot at the start and it's my tough luck [as I write this sentence I fear I know the answer!] ?