Changes to Charges

We've introduced Ongoing Charges to our investment trust reports to help you make meaningful comparisons across funds

Jackie Beard, FCSI, 12 July, 2012 | 3:09PM
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European regulation is changing for funds in an attempt to make their charges clearer and more comparable. The Total Expense Ratio (TER) will be replaced by Ongoing Charges. While neither is perfect, it’s a good step in the right direction and makes comparison across different fund types (ETF, investment trust, OEIC) easier and more meaningful.

The AIC has recommended its member firms start to calculate Ongoing Charges. It’s not yet compulsory for investment trusts, or closed-end funds, to do this, but their view—and ours—is that it’s only a matter of time before this happens. So it makes sense to start using them now.

The Ongoing Charges are the costs you can reasonably expect to pay as an investor from one year to the next, under normal circumstances. They include all professional fees, management fees, audit fees and custody fees.

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