Fund factsheets help - charges & savings | Hargreaves Lansdown

Initial charge

Most unit trusts and OEICs levy an initial charge. This is a fee payable to the fund manager when you first invest. We have negotiated special terms with fund management companies which allow us to discount most, if not all, of the initial charge for over 1,500 funds.

Initial saving

This shows how much we can save you on the standard initial charge. For instance, if the initial charge was normally 5.25% and we offer a 5% saving you would actually pay an initial charge of only 0.25%. Please remember for unit trusts there may also be a small difference between the buying and selling prices, known as the bid-offer spread. For more details about the way in which savings are calculated see our Guide to Fund Prices, Savings and Yields.

Annual charge

The annual charge is levied by the fund management company to cover the cost of managing funds. They are normally deducted on a daily basis and reflected in the price of the units. This means that you will not see them shown on your statement and you do not need to pay for them separately.

Annual saving

When you buy funds part of the annual management charge is usually shared with your broker through what is known as renewal commission. This makes absolutely no difference to the charges you pay; if you invest directly with the fund manager they simply keep the renewal commission themselves. We use part of the renewal commission to administer your account and return the rest to you by way of loyalty bonuses. Please note the loyalty bonus is not available for funds held through the Vantage SIPP.

Total Expense Ratio

The Total Expense Ratio (TER) represents the total annual costs involved in running a fund. The TER consists principally of the manager's annual charge, but also includes additional costs for other services paid for by the fund, such as the fees paid to auditors, registrars and the financial press.