FAQ about Funds
FAQ about Stockbrokers
A fund is a ‘collective investment vehicle’ that allows you to invest indirectly in equities, bonds, property or other types of assets. It's collective in the sense that your money is pooled with that of other investors. A fund manager runs the fund and selects the investments it holds in line with the fund objective.
Most funds offered to UK individual investors are open-ended, which means that a fund manager issues new shares or units when they get new money in, or cancels shares or units when investors take their money out. This means that the price of individual units is not usually affected by imbalances between investors wanting to buy or sell. The price of units should therefore typically reflect the value of the assets in the fund.
Yes. This will depend on the fund’s investment objective and the underlying assets held within the fund as a result of the investment objective. You can find out more about the fund’s objective and risks on the fund factsheet and the accompanying Key Investor Information Document (KIID). Assets have different risk reward profiles; the general principal is that investments should provide higher profits if the chance of losing money is higher, as investors should be compensated for increased uncertainty. On each fund KIID there is a ranking between 1 and 7 which represent the risk reward profile of the fund. A ranking of 1 indicates the fund is of a lower risk profile and potential lower reward, and a value of 7 suggests a higher risk profile and typically therefore a higher reward. This ranking provides an indication of risk but is based on historical data which may change over time and may not be a reliable indication of the future.
How do I choose the right fund for me?You should consider your personal circumstances, including how long you want to invest for, as well as your investment goals and your attitude to risk. There are funds to meet almost any investment goal, investing in all kinds of companies in all kinds of economies around the world. To narrow down your search, you may want to look at:
You should remember that past performance is not a guide to future performance. The value of funds can fall as well as rise and you should be prepared to lose all or some of your money. If you are unsure what fund is suitable for you, seek independent advice. We do not offer advice.
You can find comprehensive fund performance data in our Funds Research centre and in the Key Investor Information Document (KIID). Fund managers recommend you usually hold a fund for at least three to five years. You should remember that past performance is not a guide to future performance.
Traditionally OEICs have a single price which is the same for both buying and selling, while unit trusts normally have a buy price known as the offer price and a sell price know as the bid price. The offer price will be higher than the bid price and the difference reflects the initial charge for investing as well as the difference in cost between selling and buying the underlying assets the fund invests in. With OEICs you pay this initial charge separately.
Many funds offer investors a choice of either income or accumulation units. If you select income units you will receive any income generated by the underlying holdings. Accumulation units/shares will instead increase in value if income is generated from the holdings as the income is kept within the fund.
What are clean share class funds?
Clean share class funds are, lower cost funds available to investors. You can access these following the implementation of new rules set out in the Retail Distribution Review (RDR), an initiative by our regulator, the Financial Conduct Authority (FCA). The aim of the RDR is to give investors a more transparent view of how they are charged for certain products and services. The RDR affects all firms who provide services for retail investors to buy, sell and hold funds.
Fund managers charge an Annual Management Charge (AMC) for running the fund which they deduct from the value of the fund. Prior to the review this fee for managing the fund was typically around 1.5% per year for actively managed equity funds, and lower for passive or tracker funds. Fund managers generally paid part of this AMC to brokers and intermediaries (in this case Barclays Stockbrokers) for providing services associated with advice, distribution and administration of holdings in the funds. This part of the Annual Management Charge AMC is commonly referred to as a ‘trail commission’, ‘trail fee’, or sometimes a ‘Fund Manager rebate’.
The FCA decided that investors should be given a clearer view of how much they pay fund managers for their services and how much they pay investment service providers, such as Barclays Stockbrokers, for theirs. Therefore now when you invest in funds through Barclays you will usually pay a lower AMC to the fund manager and a separate Fund Administration Fee to Barclays Stockbrokers. This fee is charged at 0.35% per year on the first £500,000 of funds in your account, with a minimum of £35 per year. Investors using the Regular Investment Service won’t have to pay the £35 minimum fund administration fee, keeping investment costs low.
Although you’ll pay two charges, we expect most clients will generally pay less. Prior to the RDR the typical AMC for a fund was 1.5%. While the new clean share classes on the Barclays Stockbrokers Funds Market will have an average AMC of 0.68%, if you add the fund administration fee of 0.35% this comes to 1.03% which is lower than the typical AMC of 1.5% that prevailed before. In order to ensure that clients benefit from the changes as soon as possible, we have been converting any existing funds held with us into clean share classes, where available during 2014.
Most funds can be held in an ISA. However HM Revenue & Customs (HMRC) regulations mean there are some which are not permitted. When researching funds on our Fund Search you can select to only look at funds which are ISA eligible.
Yes they can. Income is paid out as cash if you hold or income units, also known as distribution units. If you hold accumulation units these will increase in value as the income is retained within the fund. The income from funds can fall as well as rise and returns are not guaranteed.
When buying funds you can incur one off entry or exit charges however when you buy funds on our Funds Market you avoid any initial charges or dealing commissions. The initial fee varies by fund manager and fund but this can typically save you up between 3-5.5%. However if you buy funds which are not part of our Funds Market you may incur initial charges on purchases.
The Ongoing Charges Figure (OCF) of the fund includes the cost of running the fund and the fund managers Annual Management Charge (AMC). The AMC is the fee investors pay to the manager for their expertise in managing the investments, this fee is calculated on a daily basis and factored into the price of the fund.
Some funds will then also charge a performance fee. This fee is only taken if they deliver a return to investors above a specified performance target. The (Key Investor Information Document) KIID will state all the potential charges associated with a fund. You must confirm you have read this document before investing in any fund.Fees Charged by Barclays Stockbrokers
Barclays Stockbrokers charge a fee for the administration of your investments. The Fund Administration Fee is 0.35% per year subject to a minimum charge of £35 per year per account. The fee is calculated on the daily value of eligible fund holdings, up to a maximum of £500,000. There is no further charge on fund holdings over £500,000.
You do not pay the general account administration charge on an ISA, SIPP or MarketMaster® accounts when you hold only funds in your account.
The Key Investor Information Document (KIID) is a brief document which tells you about the key features and risks of the fund or ETF that you are investing into.
For Undertakings for Collective Investment in Transferable Securities (UCITS) funds, the document replaces the Simplified Prospectus which fund managers previously published for their funds.
We will ask you if you have accessed and read the KIID before placing each purchase. The KIID is located on the fund factsheet in the Research Centre.
In addition, if this is the first time you have traded in an ETF you will be asked to complete an Appropriateness Assessment questionnaire before you are able to place your investment instruction.
Funds are usually valued once a day and therefore trade on a ‘forward price’ basis. Fund managers calculate the total value of the investments held, deduct any charges and divide this by the number of units/shares issued in order to determine the funds price each day. When you place a buy or sell order, the instruction is processed by the fund manager’s next valuation price, which won’t yet be known. Therefore you will not know the exact price at which you will buy or sell a fund. This price is generally then published overnight so the price shown for a fund usually relates to the previous day’s valuation.
Fund settlement is variable and is normally between 2 and 5 working days from the valuation point. When you place your deal online we will give you an indication of the expected settlement date. We will send you a contract note confirming the deal details once we have received confirmation from the fund manager.
If you hold bundled share class funds purchased prior to April 2014 we may receive trail commission from the fund manager.
This payment from the fund manager to Barclays Stockbrokers will stop if your fund is converted to a clean share class. Once converted the Fund Administration Fee will apply.
The Fund Administration Fee will apply to all fund holdings from 6 April 2016.
To find out more information on our Disclosure of Inducements for Funds, please view our Disclosures.
FAQ about Barclays Stockbrokers
Barclays Stockbrokers give you instant access to a range of comprehensive research and information services through our website.
You will pay no initial charges or dealing commission when investing in funds on the Barclays Stockbrokers Funds Market. You pay no account administration charge on an ISA, SIPP or MarketMaster® when you hold only funds in your account, however a Fund Administration Fee is payable on ‘clean share class’ fund holdings.
Barclays Stockbrokers Funds Market is a selection of more than 2,000 lower cost ‘clean share class’ funds from more than 100 leading fund managers. You can place an order in any Funds Market fund online or by telephone from a minimum of £50.
Through our Funds Market you can choose from more than 2,000 lower cost ‘clean share class’ funds. These are mostly UK-based unit trusts or OEICs, but we also offer a number of funds registered in Luxembourg and the Republic of Ireland. We may also be able to purchase other funds not included in our main Funds Market – please call us to enquire.
Yes, you can buy and hold funds through any of our accounts. For certain accounts such as ISAs there may be HMRC restrictions on which funds you can buy. When using our funds factsheet search you can filter by ISA eligibility.
We have reduced the minimum online investment for funds in our Funds Market to £50.
As soon as you have placed a funds order, if you have the ‘Available to Invest' facility, this amount and ‘Holdings' will be adjusted and you will not be able to use either the cash or the units in future orders until your deal is carried out.
Fund orders will be carried out at the next appropriate valuation point, the expected valuation point will be indicated online when you place your order, and will settle normally between 2 and 5 working days from the valuation point.
At any time after you have placed a fund order you will be able to check its progress by accessing the ‘Order Status' area of the website. A contract note will be posted to you following the successful dealing of your funds order. A record of your deal will also be accessible in the ‘Deal History' area of the website.
Due to fund settlement processes, you cannot sell a fund purchase until your deal has fully settled.
Yes. You can transfer fund holdings held with other providers or fund managers to your Barclays Stockbrokers account. Find out more.
The Barclays Stockbrokers Regular Investment Service offers you the opportunity to make regular monthly investment instructions into a select range of funds available on the Barclays Stockbrokers Funds Market. We allow up to 10 Regular Investment instructions per account. See ‘How do I set up a Regular Investment?’
To set up a Regular Investment it couldn’t be easier, you simply have to give us the following information:
a) Which fund(s) you want to invest into
Please ensure your Barclays Stockbrokers account has sufficient cleared funds available by 10am the day before the relevant dealing day in order for us to carry out your Regular Investment.
To cancel your instruction you need to call our contact centre on 0800 279 6551* or 0141 352 3909* and notify us of the Regular Investment you wish to cancel.
For MarketMaster® accounts you can invest either a cash amount or buy a specific number of units or shares.
You can check your account online by visiting the Account View section of our website. We will also send you regular statements and valuations. Our funds research centre also has comprehensive data on all UK funds and their performance.