Astonished at these charges!

[supremetwo]

New information sheet from my broker this year that specifies the fees taken by 'Fund managers'.
You can see how much you paid for buying, selling and holding investments with us (‘Our charges’), as well as the amount that went to fund managers for managing your collective investments (‘Fund managers’ charges’), if applicable.
Fund manager charges aren’t taken from cash in your account(s), as they’re factored into the price of the investment itself.

Some of the investments, I have never considered as funds and a few of the percentages are eye-watering.

The headings are:- Annual ongoing, Transaction, Incidental, Total charges £ and %.

TRITAX BIG BOX REIT 1.53% 1.09% 4.91% Total 7.5%
EMPIRIC STUDENT PROP 5.46% 1.29% 0% Total 6.75%

Others listed:
3I group total 2.81%
3IN total 2.18%

JLEN is also listed but it's total is just 0.41%

[Spet0789]

New information sheet from my broker this year that specifies the fees taken by 'Fund managers'.
You can see how much you paid for buying, selling and holding investments with us (‘Our charges’), as well as the amount that went to fund managers for managing your collective investments (‘Fund managers’ charges’), if applicable.
Fund manager charges aren’t taken from cash in your account(s), as they’re factored into the price of the investment itself.

Some of the investments, I have never considered as funds and a few of the percentages are eye-watering.

The headings are:- Annual ongoing, Transaction, Incidental, Total charges £ and %.

TRITAX BIG BOX REIT 1.53% 1.09% 4.91% Total 7.5%
EMPIRIC STUDENT PROP 5.46% 1.29% 0% Total 6.75%

Others listed:
3I group total 2.81%
3IN total 2.18%

JLEN is also listed but it's total is just 0.41%

Doesn’t this just reflect the fact that the bid-offer spreads on the properties these REITS purchase are huge?

[SalvorHardin]

I don't own either "fund", but one thing leaps out at me from a quick look at their websites. I'd classify them as property companies, not funds, even if they are sub-contracting everything to do with the properties. So their costs are going to be much higher than a fund which just owned securities.

In particular Tritax's site currently mentions that planning permission has been received for a regional distribution centre in Biggleswade. Funds don't generally directly own things which require planning permission.

So I suspect that some of the companies' operating costs have been classified as management charges due to the way the KIID rules work. It's a bit like how KIID's treat interest on investment trust borrowings as charges, but don't properly allow for the returns on the invested borrowings.

It was daft to allow property companies to call themselves "investment trusts" when Britain copied American's REIT legislation (investment trust means something different in America). I dread to think how much the "charges" on British Land and Land Securities, two long established property companies which are now REITs, would be if they were marketed as "funds".

[Alaric]

So I suspect that some of the companies' operating costs have been classified as management charges due to the way the KIID rules work. It's a bit like how KIID's treat interest on investment trust borrowings as charges, but don't properly allow for the returns on the invested borrowings.

For that matter, the charges may well include interest costs for the REITs. You want the effect of gearing to be disclosed in its own right, not confusing the issue regarding the costs of running the Company.

[richfool]

Mine looked quite frightening when I received them on my IT and stock portfolios. But upon thinking about it, I realise they include things like: admin fees, trading fees, and then the costs within the trusts themselves (as shown on KID's), including their admin fees, fund transaction costs, 'other' costs, performance fees etc. I noted that it even showed a £15 admin fee imposed by the portfolio manger when I transferred some funds out of the account.

[supremetwo]

Mine looked quite frightening when I received them on my IT and stock portfolios. But upon thinking about it, I realise they include things like: admin fees, trading fees, and then the costs within the trusts themselves (as shown on KID's), including their admin fees, fund transaction costs, 'other' costs, performance fees etc. I noted that it even showed a £15 admin fee imposed by the portfolio manger when I transferred some funds out of the account.

One wonders how much extra we have to pay our brokers to provide this detailed information?

And for the public-sector/EU policing of it?

[MDW1954]

New information sheet from my broker this year that specifies the fees taken by 'Fund managers'.
You can see how much you paid for buying, selling and holding investments with us (‘Our charges’), as well as the amount that went to fund managers for managing your collective investments (‘Fund managers’ charges’), if applicable.
Fund manager charges aren’t taken from cash in your account(s), as they’re factored into the price of the investment itself.

Some of the investments, I have never considered as funds and a few of the percentages are eye-watering.

The headings are:- Annual ongoing, Transaction, Incidental, Total charges £ and %.

TRITAX BIG BOX REIT 1.53% 1.09% 4.91% Total 7.5%
EMPIRIC STUDENT PROP 5.46% 1.29% 0% Total 6.75%

Others listed:
3I group total 2.81%
3IN total 2.18%

JLEN is also listed but it's total is just 0.41%

I haven't checked, but it could well be that these charges are taken from KID documents, which the AIC has led a campaign about, rubbishing.

Check the KIDs. If you see these charges in them, then you can treat them with a large pinch of salt.

In September 2018, the AIC put out a document entitled "Burn Before Reading". That should bring you up to speed on the issue.

MDW1954

[gbjbaanb]

I would hope that these charges are taken from what the fund (and broker platform) has charged me! That's how they are presented, as money that I would have had myself,, had they not been taken from me by whomever. If they were guesstimates, then I would expect that to be clearly shown.

[TwmSionCati]

Mind you, only the ‘Annual ongoing charges’ are independent of one’s own trading behaviour.

As to EMPIRIC STUDENT PROP 5.46%, I have PREMIER GLOBAL INFRA 6.16%; can anyone beat that?

The figures don’t seem to have been taken from the KIDs, which have
— Portfolio transaction costs: EMPIRIC 1.30%, PREMIER 0.21%
— Other on-going costs: EMPIRIC 4.27%, PREMIER 9.24% (including 5.33% cost of gearing)


TSC