Fund management companies make charges for looking after your investment. This is how they raise money for everyday business expenses and any specialist resources needed to manage your fund. Charges, charge, investment, invest, investing, fund, funds, initial, management, fundsnetwork, managers, switching, fee, fees, stamp, duty, exit
Charges explained

The cost of investment expertise

Just as fund management companies make charges for looking after your investment, so do banks and building societies by withdrawing some of the money made on deposits.

Some funds, such as those that "track" a stockmarket index, have relatively low charges. Others have higher charges because they rely on particular investment expertise and extensive research.

Initial charge

An initial charge is made when the fund management company keeps a proportion of your money before investing the rest. Not all funds feature this charge. The initial charge can be 5% or more of the amount you are investing, but for most funds in FundsNetwork it is 1.25% or less. With certain companies initial charges are lower inside an ISA than they are outside.

Annual management charge

Each year investment managers keep back a proportion of the value of a fund. This is usually between 1% and 1.5%. Few funds in FundsNetwork have an annual management charge of more than 1.75%. The charge is incorporated into the price of the fund and is calculated daily, so it does not appear on your statement.

Switching fee

In the past, if you switched money from one fund to another you had to pay the usual initial charge for the new fund. Within FundsNetwork however, all you pay is a switching fee of just 0.25% (and any additional bid-offer spread with unit trusts). This makes it cost effective as well as simple to adapt your investments as your needs change. Funds with no initial charge have no switching fee either.

Other fees and expenses

Stamp duty (0.5%), audit, custody, depository and trustee fees may be payable by the funds when investing in shares and securities and such taxes are charged against the fund's capital.


Bid-offer spread

If you look in the financial press you'll see that there are two prices quoted for a unit trust; a price to buy - the offer price, and a price to sell - the bid price. This is what's called 'dual pricing' or the 'bid/offer spread' which is explained in detail within the units trust section of this website.

No exit fees

FundsNetwork does not charge an exit fee when you sell your investment. It doesn't matter whose funds you own through FundsNetwork - Schroders, Invesco Perpetual, Fidelity or anyone else - no exit fee is charged when you sell.

It's also worth noting that there are no additional fees when you hold investments with FundsNetwork compared to holding them directly with the fund company. You will find that other services may have exit fees when you sell or have additional fees above what a fund company charges.