How does HL compare charges?
Fund charges can eat away at performance and your returns, so it’s important to weigh up performance potential against the cost of investing in a particular fund.
If there are two funds offering the same performance potential, charges become a greater consideration – especially when looking at passive funds.
We’ve created a charge comparison to help you quickly see the relative cost of investing in a fund against similar funds in the same sector.
How the charge comparison works
We break down each fund sector on our platform into funds with active and passive management.
We then order these sets of funds by their Ongoing Charges Figure (OCF) and score them.
There are five scores available, the lowest-charging get £, the highest-charging get £££££.
As an example, we divide funds in the UK All Companies IA sector into active and passive groups. We then order the funds in each group by the net charge paid by HL clients. We then give a £ to the cheapest 20%, ££ to the next 20% and so on.
Other considerations:
- When we say ‘group’ below we mean: all passive/actively managed funds in their IA sectorThe Investment Association is the trade body and industry voice for UK-based investment management. The IA sectors divide the funds universe to reflect the asset type, industry sector, or geographic regions funds are invested in.
- Where we’ve created sets of funds (e.g. the Wealth Shortlist) the charge comparison will still be based on a fund’s respective IA sector. You can filter by IA sector using our Fund Finder
- A fund’s net OCF is compared against its group – this is the charge after any discounts so we’re comparing what you pay on our platform
- Funds in groups with the same charge will be rated the same. In groups where lots of funds have the same charge, each rating of £-£££££ won’t necessarily have the same number of funds
- If all funds in a group charge the same, they would all get a £££ rating (i.e. ‘average’)
- If funds in a group split over two charges, they would be rated ££ and ££££ (i.e. lower or higher than average respectively)
- If a group contains fewer than five funds, (or the fund sector is ‘unclassified’) we won’t apply a rating
- Ratings are calculated for unbundled fundsFunds launched after 6 April 2014. FCA rules mean that any commission paid by funds purchased from this date must be rebated to the investor. As a result, fund management groups launched new versions of their funds with lower annual management charges, which do not include any commission.only. This is the version of a fund available for new investors
Remember when investing with HL, our platform fee of up to 0.45% per year also applies.