LGUKIA costs

[Jam1]

Morning all, whilst I run HYP and IT portfolios for income, I also have a Tracker portfolio. I had for many years invested in two trackers through L&G, which have relatively recently been shifted to a new online investment platform. I had seen a headline about charges so thought I would take a look at the two L&G Funds.

LGUKIA: UK Index Trust R Acc - ongoing charge 0.48%
Japan Index Trust I Acc - ongoing charge 0.53%

In comparison the Vanguard all share index equivalents for UK and Japan charge 0.06% and 0.16%.

So the sensible thing to do is sell the L&G Funds and repurchase Vanguard, or another variant with lower charges. No tax implications as sitting in an ISA. I can even take the opportunity to move to income variants of the trackers.

Somewhat ironic as I also hold L&G in my HYP.

What am I missing?

Thank you
Jam (tomorrow)

[GeoffF100]

You of course you should. You are not missing anything (now).

[monabri]

What am I missing?

Jam (tomorrow)

What you will be missing is the higher charges.

[Jam1]

Wished I missed those charges sooner!

Looking more closely the charges differ by class, e.g. Class I for the same L&G Trust charges 0.18%. What was I getting for the extra 0.3%?

A lower charging swap for LGUKIA looks to be:

Multi Units Luxembourg LYXOR CORE UK EQUITY ALL CAP (DR) - DIST (LCUK) has a charge of 0.04% (and 3.8% dividend yield).

The only risk being the index moves between buying and selling. Unlikely right…..but could easily negate savings.

Thanks Geoff and Monabri.

[Alaric]

Looking more closely the charges differ by class, e.g. Class I for the same L&G Trust charges 0.18%. What was I getting for the extra 0.3%?

I stood for "Institutional" and R for "retail". All you got was contributing to their higher costs of servicing retail clients and avoiding the hefty minimum investment limits imposed on institutional investors.

[GeoffF100]

A lower charging swap for LGUKIA looks to be:

Multi Units Luxembourg LYXOR CORE UK EQUITY ALL CAP (DR) - DIST (LCUK) has a charge of 0.04% (and 3.8% dividend yield).

The only risk being the index moves between buying and selling. Unlikely right…..but could easily negate savings.

About Lyxor:

https://monevator.com/lyxor-core-etfs-v ... -wrinkles/

Do your research before buying. You are best to stick with the big fund managers (e.g. Vanguard) unless you really know what you are doing. The index will certainly move between buying and selling, but nobody can predict which way it will move.

[Jam1]

Thanks Geoff. I already hold Vanguard products but not Lyxor, and the difference between 0.06 and 0.04% is £2 on a £10,000 investment as noted in the article you highlighted. So sensible advice.