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Converting your funds

| 12 September 2017 | A A A
Converting your funds

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

We offer access to two classes of funds: unbundled and inclusive funds. Unbundled funds typically have low annual charges and low, or no, loyalty bonuses. Inclusive funds on the other hand typically have higher annual charges, but also higher loyalty bonuses. These higher loyalty bonuses offset the higher charges, meaning the cost to the client will, in many cases, be similar whichever class of fund they hold.

Any funds bought prior to 1 March 2014 are likely to be inclusive funds. The majority of these are also now available as unbundled funds. Some investors will prefer to convert to the newer unbundled funds, while others may choose to continue holding inclusive funds. We give our clients the choice.

You can compare the charges and savings of a fund’s unbundled vs inclusive units by selecting your fund of choice then comparing the annual charges on the ‘At a glance’ tab.

Compare fund charges and savings

How to convert

Converting units is free, there is no tax liability and you will remain invested throughout the conversion process. The easiest way to give us your instruction is online, but you can also apply in writing. It is not possible to convert over the telephone. You can instruct us to convert all your funds, or only some if you prefer.

Learn more and convert now

If you're not currently registered for our online service you can register now.

There are no charges to convert and HMRC has confirmed that conversions will not count as disposals for capital gains tax purposes.

Once you have given your instruction you can continue to trade in your inclusive fund, or cancel the conversion, at any time whilst your order is still 'pending'.

Frequently asked questions about converting funds

When will my conversion take place?

Conversions take place on a quarterly basis in March, June, September and December.

We expect to submit the next round of conversion instructions to the fund groups from Saturday 16 September 2017. The deadline for providing an instruction is Friday 15 September.

Once your instruction to convert units has been passed to the fund group you will be unable to buy or sell units in the inclusive fund for up to two weeks – and sometimes longer – though we expect most conversions to complete much sooner. Please only instruct a conversion if you are comfortable with this.

You will be able to add to the unbundled versions (but not to the inclusive class) of any units you have asked us to convert while the conversion is underway.

You can monitor the progress of your conversion, and cancel a pending order, within the Pending orders tab of your online account.

The conversion itself will not affect the value of your holding. However as unbundled units usually have a different price to the inclusive units, you will hold a different number of units after the conversion has completed. Your confirmation letter will clearly show all the detail, as well as the conversion ratio which will have been applied.

Please note: Once the conversion has taken place, you cannot convert back to inclusive units. As a result of the conversion, any future loyalty bonus payments you receive on your new fund holding must be reinvested in further fund units, you cannot withdraw this as cash or use it to cover fees. Our regulator requires us to do this where there are changes to your holdings after April 2014.

Switches

You can also switch from one class of fund to another (e.g. inclusive units to unbundled units) via our normal dealing service. When you switch through the Vantage Service you place a single instruction and the sale will normally be placed by the end of the working day following receipt of your instruction. The purchase will normally be placed by the end of the following working day. The advantage of switching is that you avoid the potential period outlined above where you will not be able to sell your units.

However, please note a bid-offer spread or dilution levy may apply which could affect the value of your investment. Furthermore, as you will hold cash while the switch takes place you will not benefit from any growth in the market until your money is reinvested. If your funds are held outside an ISA or SIPP, there is also the risk that switching could create a capital gains tax liability. All these potential pitfalls are avoided by converting.

Tax rules can change and all investments can fall as well as in rise in value so you could get back less than you invest. This article is not personal advice, if you're unsure of the suitability of an investment for your circumstances please seek personal advice.