TER/OFC included in Performance figures?

[sackofspuds]

This may be a daft question which is why I'm posting it to the How.. board but I am looking at fund performance using trustnet.com and they quote Cumulative Performance over 1, 3 and 5 years.

As I recall, using Cumulative return is a bit unusual; most sites like Morningstar generally annualise but I am looking at pension provider funds and trustnet seems particularly good at including those.

Anyhow, they say:
Total return performance figures are calculated on a bid price to bid price basis (mid to mid for OEICs) with net income (dividends) reinvested.

Fair enough. What I want to know is whether the TER/OFC is taken into account in these performance figures?

As an example, here's where my employer is putting pension contributions by default:
https://www.trustnet.com/factsheets/p/i ... festyle-pn

[Alaric]

What I want to know is whether the TER/OFC is taken into account in these performance figures?

Presuming that the fund price is established in the normal manner after taking out charges, then the answer is yes. As far as performance is concerned the fund that earns 11% with charges of 1% has the same performance as one that earns 12% with charges of 2%.

Watch out for platform fees over and above those taken by the fund manager.

[sackofspuds]

Thanks for the quick reply, Alaric.

So while charges are obviously a drag on performance given they are coming out of the fund, if the performance is still good then I guess in some ways the level of charges is immaterial. Of course, I realise there were / are plenty of examples where performance is low and charges high which is clearly irritating.

I also read that OFC does not include dealing charges which might be of the order of 1.5%.

[Alaric]

So while charges are obviously a drag on performance given they are coming out of the fund, if the performance is still good then I guess in some ways the level of charges is immaterial.

I did notice this was a double branded fund, one with both the name of the pension provider and the fund manager. Double branding can mean double charging. You might find the fund manager's charge included in the price as usual whilst the provider's charge is met by cancelling units or as a first charge on new contributions. That enables fund fact sheets to quote a better performance than anyone actually achieves in practice.