FEES

Closed-end funds and OEICs
geoff1309
Posts: 8
Joined: November 5th, 2016, 2:28 am

FEES

Postby geoff1309 » January 9th, 2017, 7:35 am

Could anyone please tell me when looking at yields is that net of charges? eg. say yld is 6% then mngt. charges and sometimes performance fees , does this reduce the div. of 6% .? thanks in advance .

SalvorHardin
Posts: 23
Joined: November 4th, 2016, 10:32 am

Re: FEES

Postby SalvorHardin » January 9th, 2017, 7:50 am

The yield (the dividend) is net of all charges. It is not reduced by the fees.

These fees (annual management, custody, etc.) are paid by the investment trust out of its assets. The only fees that Investors directly pay are those charged by their broker, ISA/platform provider, etc.

The one exception that I can think off is foreign listed funds where there may be withholding taxes on dividends (e.g. US closed-end funds - American dividends are subject to 15% or 30% withholding tax for foreign investors, which does reduce the quoted yield)

CryptoPlankton
Lemon Pip
Posts: 56
Joined: November 4th, 2016, 12:12 pm

Re: FEES

Postby CryptoPlankton » January 9th, 2017, 11:00 am

I'd only add that it does sometimes seem to depend on the source of information. When I used to look at the FT site (before it was revamped) the "Yield" quoted for IT's did appear to be before the deduction of fees - as subtracting the management fees that they used to quote on the same page always gave a figure more in line with the yield quoted by my stockbroker (Barclays).

The FT now quotes "Annual div yield" which seems to tally with other sources and I haven't come across anywhere else that doesn't quote a "net" yield - but just thought it was worth mentioning...

geoff1309
Posts: 8
Joined: November 5th, 2016, 2:28 am

Re: FEES

Postby geoff1309 » January 9th, 2017, 11:02 am

Thanks very much for detailed info.

SalvorHardin
Posts: 23
Joined: November 4th, 2016, 10:32 am

Re: FEES

Postby SalvorHardin » January 9th, 2017, 11:42 am

CryptoPlankton wrote:I'd only add that it does sometimes seem to depend on the source of information. When I used to look at the FT site (before it was revamped) the "Yield" quoted for IT's did appear to be before the deduction of fees - as subtracting the management fees that they used to quote on the same page always gave a figure more in line with the yield quoted by my stockbroker (Barclays).

The FT now quotes "Annual div yield" which seems to tally with other sources and I haven't come across anywhere else that doesn't quote a "net" yield - but just thought it was worth mentioning...


Yes, this is a real problem with some sources particularly for shares which pay foreign currency dividends but then convert them to sterling (e.g. European Assets Trust, Unilever, BP). A way to avoid this is to look at the most recent company report, find the actual dividend and then work out the yield using the current share price.

This helps avoid the situation where the interim dividend has been increased substantially but the information source uses the last year's dividend and so understates the true yield. Also where there has been a one-off dividend or capital distribution where the typical summarised data source treats this as a recurring dividend and thus gives the share a massive yield which will not repeat the following year.


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