A question about : Fund price confusion
Hello all,
I recently added a couple of funds to my portfolio held at Royal London 360, but both have been showing losses greater than I think they should be showing, and I can not understand why.
The first of the two funds I bought is Marlborough Balanced Acc (GB0007148629) and I bought Ј30K on 05 Feb 2015.
When I look at my contract note for that transaction it tells me that I bought 19,079.4790 units at 1.572370 GBP per unit.
If I then look at my snapshot valuation for 05 Feb it tells me that the price per unit is 1.5331 and that my initial Ј30K has become Ј29,250.75 GBP, ie. a loss of Ј749.25.
That is the data that greeted me when the fund first appeared in my portfolio on 06 Feb (it always shows valuations from the previous day). So effectively, on the day I bought it, it had already lost Ј749.25!
In the mean time the value of the fund had increased according to Trustnet, but today's snapshot valuation (yesterday's price) shows I'm down Ј524.11.
It seems to me that I've somehow been over charged (1.572370 when the price should have been 1.5331). There were no other fees on the transaction, and I can't find any other explanation for the discrepancy.
Does this make any sense to anyone here?
It also appears that a similar error has occurred on another purchase I made a few days later, and once again the value is lower than it should be.
I did try to speak with Royal London about this, but they just kept repeating the mantra prices can go down as well as up, but I don't think the person I spoke to noticed any discrepancy, and I still had not figured out what had gone on at that time by comparing the contract note price to the snapshot valuation price.
Thanks in advance for any advice.
Best answers:
- Thanks. It was my first time buying a fund like this so I was not expecting to see an instant loss. It does make more sense now.
- Hi,
there is an initial charge of 5.25% on this fund.
Did you buy it direct or through a broker? - Looks as if that 5.25% is in the spread.
HL offers a different share class of that fund with a much smaller spread, and full cession of the quoted 1% initial charge.
Marlborough Balanced Class P - Acc - No platform here, it looks like the OP bought direct from Royal London.
[This post is nonsense, put right by masonic] - RL360 seems to provide some sort of offshore bond wrapper for expats, from trying to decode its website. It was spun off from Royal London in a management buy out.
That is not to say I know any more than that about it, or what it's for. - frugalmacdugal - I bought it via my platform (Royal London 360). I don't think there are any initial charges on my platform. I've bought (other funds) a few times and have not been charged, or had the value drop like it did this time.
Sometimes when I've gone to buy a fund my platform tells me that there is an initial charge. Eg. Marlborough UK Micro Cap Acc (GB00B02TPH60) it says "Initial charge: 5.00%", but I found no evidence of a charge being incurred... unless the charge was deducted directly from the asset value (I'll have to check!).
When I worked it out the loss on my Balanced buy came to around 2.5% if I remember correctly - yet it says there is a 5.25% initial charge when I go through the motions as if I'm about to buy the fund, so that makes no sense to me.
redbuzzard - Perhaps you are right and it's a "sneaky way" of applying the initial charge. When I look at my contract notes for "buys" it specifically says "Third party fees 0.00".
My platform also has the "P" share class available, however it says minimum purchase amount is Ј1,000,000. I have no idea if it would apply though since I keep coming across contradictions like the example I posted above for Micro Cap. Either way the AMC on both Balanced share classes is 0.0 according to my platform!
I had wondered why I couldn't get access to clean share classes whilst most people on here seem to have access to them, but it does seem as if I already effectively have the clean share class. - Thanks redbuzzard. Yes, I have actually been considering other platforms in an effort to limit charges. Each buy or sell costs Ј60, at least for standard OEICs/unit trust funds - I'm not sure if that applies to EFTs and Trust funds although I suspect it does.
I'm still undecided as being with RL360 has been an overall positive experience so far, but will continue to look at alternatives. HL sounds to be one of the better alternatives to me so far. - Hi,
Quote: - I'm a customer of Hargreaves Lansdown. I could save a fraction of a percent in annual platform charges if I moved somewhere else. But I stay with H-L because their website is the best I've used, and if you do need to ring them you get through to someone who knows what they are talking about.
H-L is not the cheapest (nor the most expensive) but for me what they provide is good value. - Do you currently have any ongoing charges for holding your funds at RL360 (other than the fund management charges)?
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