Investment Companies

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Charges

There are various charges attached to investing in an investment company. If you go direct to a stockbroker or execution only dealing service you will have to pay:

  • Stockbroker commission charges on buying and selling investment company shares
  • Buying an investment company is buying a share so a government imposed Stamp Duty of 0.5% is applied on all purchases (e.g. if you buy £5000 worth of shares, you will pay £25 in Stamp duty)
  • An indirect charge will occur when buying and selling investment companies as the price a broker will pay for the shares will be lower than the price they will sell them at - the so called bid/offer spread
  • Annual management fee and the administration cost (internal charges) known as the Total Expense Ratio (TER). Many investment companies also have a performance fee in place

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