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  • FIRST POST
    • henryandmay
    • By henryandmay 10th Aug 18, 2:24 PM
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    henryandmay
    What do the different fund class mean?
    • #1
    • 10th Aug 18, 2:24 PM
    What do the different fund class mean? 10th Aug 18 at 2:24 PM
    For example;

    BlackRock Consensus 85 Class I - Accumulation (GBP)

    And

    BlackRock Consensus 85 Inclusive - Class A - Accumulation (GBP)

    What does the class I and A mean and which one would someone chose to invest in?

    Thanks
Page 1
    • MallyGirl
    • By MallyGirl 10th Aug 18, 2:27 PM
    • 3,133 Posts
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    MallyGirl
    • #2
    • 10th Aug 18, 2:27 PM
    • #2
    • 10th Aug 18, 2:27 PM
    usually one is institutional and one is retail. The info docs will tell you the difference - the retail one usually has a much smaller minimum investment figure
    • henryandmay
    • By henryandmay 10th Aug 18, 2:29 PM
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    henryandmay
    • #3
    • 10th Aug 18, 2:29 PM
    • #3
    • 10th Aug 18, 2:29 PM
    So retail is open to joe public to invest?
    • MallyGirl
    • By MallyGirl 10th Aug 18, 2:32 PM
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    MallyGirl
    • #4
    • 10th Aug 18, 2:32 PM
    • #4
    • 10th Aug 18, 2:32 PM
    yes - if your platform supports it.
    • ColdIron
    • By ColdIron 10th Aug 18, 2:34 PM
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    ColdIron
    • #5
    • 10th Aug 18, 2:34 PM
    • #5
    • 10th Aug 18, 2:34 PM
    The A class is the old pre-RDR version that HL call 'inclusive'. It has a higher OCF though this will be rebated to you. You want the newer 'clean' I class
    • henryandmay
    • By henryandmay 10th Aug 18, 2:36 PM
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    henryandmay
    • #6
    • 10th Aug 18, 2:36 PM
    • #6
    • 10th Aug 18, 2:36 PM
    please can you explain this as if you were speaking to a child
    • dunstonh
    • By dunstonh 10th Aug 18, 2:42 PM
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    dunstonh
    • #7
    • 10th Aug 18, 2:42 PM
    • #7
    • 10th Aug 18, 2:42 PM
    retail share classes are mostly not available to buy any more. You need a clean share class or super clean share class.

    The platform should only show you the share classes you can buy. So, when you type in the fund name, it should come back with the versions it offers. The initial charge and OCF are the things that differe with each share class.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • henryandmay
    • By henryandmay 10th Aug 18, 2:47 PM
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    henryandmay
    • #8
    • 10th Aug 18, 2:47 PM
    • #8
    • 10th Aug 18, 2:47 PM
    retail share classes are mostly not available to buy any more. You need a clean share class or super clean share class.

    The platform should only show you the share classes you can buy. So, when you type in the fund name, it should come back with the versions it offers. The initial charge and OCF are the things that differe with each share class.
    Originally posted by dunstonh
    So why would you choice one share class over another?
    • DennisTenus
    • By DennisTenus 10th Aug 18, 2:49 PM
    • 317 Posts
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    DennisTenus
    • #9
    • 10th Aug 18, 2:49 PM
    • #9
    • 10th Aug 18, 2:49 PM
    I usually go for the one with the lowest OCF overall after any discounts/rebates.... is that the right way to do it ?
    • ColdIron
    • By ColdIron 10th Aug 18, 2:55 PM
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    ColdIron
    Before the Retail Distribution Review in 2014 fund houses would pay the platform/advisor etc a commission which was reflected in the OCF (but not obviously). This is now outlawed and newer clean classes with a lower OCF were introduced and the platform/advisor must now make an explicit charge rather than the commission being hidden away in charges. The A class is the old one although the commission that would have been paid is returned to you as cash. The new I class is 'clean' as there is less jiggery pokery with commissions and rebates. The older dirty class is really only for people who had bought in before 2014 and for some reason haven't moved to the clean class. Sooner or later they may be removed from sale. You probably want as much of your money kept in the fund rather than receiving dribs and drabs as cash that you have to reinvest
    • dunstonh
    • By dunstonh 10th Aug 18, 2:57 PM
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    dunstonh
    So why would you choice one share class over another?
    Originally posted by henryandmay
    Retail share classes can still be used in legacy life assurance and pension wrappers. Sometimes it cheaper to remain on those rather than convert to post 2013 standards. ***

    Clean share classes are the default post 2013 version.

    Superclean are not available on every platform. I beleive the two bigger platforms with the most superclean funds are Old Mutual Wealth (who were the first company to offer external funds in a single wrapper under the old Skandia brand) and Standard Life.

    Some Super-Superclean have initial charges but even lower annual charge but that only makes them cheaper if you hold them for a certain period.

    *** some pre-2013 contracts are cheaper to remain on retail share classes. Plus do not forget you have multiple tax wrappers; ISA, PPP, SIPP, onshore bond, offshore bond and of course unwrapped holdings too.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • henryandmay
    • By henryandmay 10th Aug 18, 2:57 PM
    • 50 Posts
    • 8 Thanks
    henryandmay
    Before the Retail Distribution Review in 2014 fund houses would pay the platform/advisor etc a commission which was reflected in the OCF (but not obviously). This is now outlawed and newer clean classes with a lower OCF were introduced and the platform/advisor must now make an explicit charge rather than the commission being hidden away in charges. The A class is the old one although the commission that would have been paid is returned to you as cash. The new I class is 'clean' as there is less jiggery pokery with commissions and rebates. The older dirty class is really only for people who had bought in before 2014 and for some reason haven't moved to the clean class. Sooner or later they may be removed from sale. You probably want as much of your money kept in the fund rather than receiving dribs and drabs as cash that you have to reinvest
    Originally posted by ColdIron
    Thanks, so if we take my initial example CLASS I and A; I assumed CLASS I is the clean version and one that if i was investing now, would invest in?
    • eskbanker
    • By eskbanker 10th Aug 18, 3:03 PM
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    eskbanker
    Clean share classes are the default post 2013 version.

    Superclean are not available on every platform. I beleive the two bigger platforms with the most superclean funds are Old Mutual Wealth (who were the first company to offer external funds in a single wrapper under the old Skandia brand) and Standard Life.

    Some Super-Superclean have initial charges but even lower annual charge but that only makes them cheaper if you hold them for a certain period.
    Originally posted by dunstonh
    This is getting like tyres in Formula 1, how long until they introduce 'ultraclean' and 'hyperclean' to the naming convention....?
    • ColdIron
    • By ColdIron 10th Aug 18, 3:08 PM
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    ColdIron
    Thanks, so if we take my initial example CLASS I and A; I assumed CLASS I is the clean version and one that if i was investing now, would invest in?
    Originally posted by henryandmay
    Yes
    The A class is the old pre-RDR version that HL call 'inclusive'. It has a higher OCF though this will be rebated to you. You want the newer 'clean' I class
    Originally posted by ColdIron
    With HL it's easy to tell the difference as they nearly always include the term 'inclusive' as part of the fund name of 'dirty' classes, usually best avoided

    Edit: A word of warning. When selecting funds to buy, where HL display the funds in a drop down listbox they are ordered alphabetically under a heading of 'Unbundled Funds' (it's their word for clean) but where inclusive classes are available they list them in addition to, and below, the clean ones under a heading of 'Inclusive Funds', again alphabetically. It's very easy to scroll too fast, overshoot and end up selecting the wrong class, take care
    Last edited by ColdIron; 10-08-2018 at 3:41 PM.
    • DennisTenus
    • By DennisTenus 10th Aug 18, 3:23 PM
    • 317 Posts
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    DennisTenus
    So confusing and unnecessarily complicated.
    • eskbanker
    • By eskbanker 10th Aug 18, 3:37 PM
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    eskbanker
    So confusing and unnecessarily complicated.
    Originally posted by DennisTenus
    Indeed, quite hard to follow, arguably superhard, not just for beginners but even for those with intermediate experience
    • dunstonh
    • By dunstonh 10th Aug 18, 3:43 PM
    • 96,074 Posts
    • 63,881 Thanks
    dunstonh
    So confusing and unnecessarily complicated.
    Originally posted by DennisTenus
    with over half of the top 10 platforms using the same software provider, if all of them had the funds at the same prices, what differentiator do you have? You just have an inefficient market that looks like a cartel.

    It is messy but until someone thinks of a different solution, this is the best we have.

    Oh, just to add to the confusion, if you didnt use a platform or an advice service, you are still allowed to buy retail share classes. Or if the distribution chain retails their own product, then they can still bundle.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • t1redmonkey
    • By t1redmonkey 10th Aug 18, 4:34 PM
    • 83 Posts
    • 87 Thanks
    t1redmonkey
    I work for an investments company (albeit in more the admin side, rather than anything to do with the funds themselves), but even most of us don't understand the exact differences between the various share classes off the top of our heads, I think we have around 7 or 8 different ones at least.

    But the main difference will be in the charges, they'll usually be different depending on the class (and the classes with the lowest charges will usually have a higher minimum investment than ones with higher charges).

    If you can refer to the relevant fund fact sheets or Key Information Documents for the different classes, look at the charges and that should make things clearer.
    • jimjames
    • By jimjames 10th Aug 18, 7:55 PM
    • 12,869 Posts
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    jimjames
    So why would you choice one share class over another?
    Originally posted by henryandmay
    Go for the one with the lowest ongoing fees, probably shown as an OCF number like 0.5% or 0.2%
    Remember the saying: if it looks too good to be true it almost certainly is.
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