Converting
your funds

Your questions answered

• Will my regular monthly investment by direct debit change?

  Any regular monthly investments, into a fund being converted, will be automatically updated to invest in the new units once the conversion has completed – you don’t need to do anything.

• Will my historic transactions still be available to view?

  Once the conversion has taken place, all transactions in your previous holding will still be available. To view the transaction history of an old version of a fund you hold, select the ‘view old holdings’ link at the top of the table where your stocks are listed, then click on the name of the fund.

• Will the performance differ between the different unit classes?

  The fund’s underlying holdings and objectives are the same. However, funds with lower net ongoing charges may perform better over the long term as more money remains invested in the fund.

• Do I need to read the Key Investor Information Document (KIID)?

  There are no changes to the fund manager, objectives, or risk profile and so we haven’t provided you with a Key Investor Information Document (KIID). If you would like to read it, you can do by viewing the fund factsheet on our website or asking us for a paper copy.

• Do you convert inclusive funds to unbundled?

  Yes - you might notice that some of your investments due to be converted are ‘inclusive’ units being converted to ‘unbundled’ equivalents.

  We’ve been offering both types of funds since regulation changes in 2014 but as inclusive units have become less common and not offered by many fund managers, we’ve gradually been removing them from our service.

  Before 2014, most funds generally collected an Annual Management Charge (AMC). The AMC covered the costs of running the funds as well as sharing a part of this with investment platforms, like HL, to help pay for their services.

  After 2014, when the new regulation was introduced, Annual Management Charges could not include commission. The fund manager charge and our charge had to be collected separately. As a result, we pass the commission we receive on to you directly in the form of a loyalty bonus.

  Fund managers also launched new versions of their funds, which generally had lower annual management charges but no commission, and therefore typically no loyalty bonuses. These funds are ‘unbundled’.

  This means after taking account of our loyalty bonuses, the charges for each type of units are broadly the same.

  You may continue to receive a loyalty bonus, but it must be reinvested back into further fund units, in line with FCA regulation. You will not be able to withdraw them or use them to cover fees. More information about loyalty bonuses.

  Loyalty bonuses in the Fund and Share Account may also be subject to tax, depending on your tax position, while within ISAs and SIPPs there is no UK tax to pay on them.

  The only difference between the inclusive and unbundled units of each fund is the charge. In all other respects the two units are the same.