There are a number of costs associated with investment funds and these are displayed in various places, including the Liontrust website, factsheets, KIID (“Key Investor Information Document”) and KIDs (“Key Information Document”), as well as investment platforms and third party data vendors and websites such as Trustnet and Morningstar. The following explains the different charges.
If you have any questions on this, please email clientservices@liontrust.co.uk.
What is the OCF (Ongoing Charges Figure)?
The OCF represents the combination of the following:
- Annual Management Charge (“AMC”), the cost paid to the Manager for managing the fund.
- Fixed Administration Fee (“AF”), the costs associated with the administration of the fund.
- Where applicable, the costs of open ended underlying vehicles (this is defined below).
What is the Ongoing Cost?
The Ongoing Cost [1] represents the combination of the following:
- Annual Management Charge (“AMC”), the cost paid to the Manager for managing the fund.
- Fixed Administration Fee (“AF”), the costs associated with the administration of the fund.
- Where applicable, the costs of open ended and closed ended underlying vehicles, excluding UK listed Investment Trusts and REITs (Real Estate Investment Trusts) (these are defined below).
The difference between the OCF and the Ongoing Cost is that the latter includes the costs of some underlying closed ended vehicles unlike the OCF which excludes the costs of all closed ended vehicles.
What is meant by the costs of underlying vehicles?
The ‘costs of underlying vehicles’ refer to those costs associated with any funds that your fund invests in. This cost is calculated as the respective Ongoing Cost or OCF of the underlying funds (adjusted for any rebate [2] of AMC that we have negotiated with the Manager of the underlying funds).
Underlying vehicles may be open ended or closed ended and the approach taken to the inclusion of these costs is as set out above.
The level of the OCFs and Ongoing Costs of the underlying funds invested in varies depending on the investment selection of the fund managers.
Where is the OCF used?
You will see the OCF published on Liontrust’s factsheets, UCITS KIIDs and website, as well as third parties, such as data vendors and platforms, who display information on our funds.
Where is the Ongoing Cost used?
You will see the Ongoing Cost published on our European MiFID Template (“EMT”), PRIIPs KIDs and website. It also may be used by third parties, such as data vendors and platforms, who display information on our funds.
What is the impact of the difference between the OCF and the Ongoing Charge?
We want to stress that any difference between the OCF and Ongoing Cost is not a reflection of differences in costs levied by funds. The costs of underlying closed ended Collective Investment Schemes [3] (CIS) have always been reflected in the funds’ performance. The difference between the OCF and Ongoing Cost is purely a methodology difference as prescribed by regulation and industry guidance.
What are transaction costs and are these costs included in the OCF and the Ongoing Cost?
Transaction costs are those that are incurred by the funds when buying and selling investments. These costs are not captured in the OCF or the Ongoing Cost but are instead published separately.
For more information on transaction costs, please visit the relevant Fund’s Report and Accounts.
What other costs are not included in the OCF and the Ongoing Cost?
Performance fees are also currently not captured in the OCF or the Ongoing Cost and are listed separately. Performance fees are only applicable to a small number of funds [4]; more information on them can be found in the Prospectus for those funds that have performance fees.
For the majority of funds, Liontrust does not currently apply a charge for buying shares/units (a subscription charge) or for redeeming shares/units (a redemption charge). Initial charges where applicable are also not captured in the OCF or the Ongoing Cost.
Why do we use closed ended vehicles in Liontrust funds?
Closed ended vehicles such as investment trusts provide some of Liontrust’s funds with the opportunity to diversify their investments through alternative asset classes (such as infrastructure, long/short equity funds, real estate and private equity) whilst providing a more liquid alternative than investing directly in such assets given shares in closed ended vehicles are listed on a stock exchange.
Communication
Liontrust remains committed to communicating clearly with investors and aligned to industry guidance and best practice.
Liontrust will continually engage with third parties who may use this information to ensure that these charges are clear and in line with industry expectation.
[1] The Ongoing Cost refers to the MiFID Ongoing Cost which is a cost figure that includes some of the costs of closed ended CIS but excludes UK listed Investment Trusts and REITs.
[2] A rebate is a way of discounting the AMC an investor pays on a class whereby Liontrust has negotiated on behalf of the investors to lower the fee.
[3] A collective investment scheme is a pooled open ended or closed ended investment vehicle. For inclusion in the OCF, Liontrust uses the AIFMD classification of a Collective Investment Undertaking (“CIU”).
[4] Funds that may incur performance fees as at 01.02.2025 include the SF Monthly Income Bond Fund, GF European Smaller Companies Fund, GF European Strategic Equity Fund and GF Pan-European Dynamic Equity Fund.
The names of the costs may differ from fund to fund. Please refer to the relevant Prospectus for further information.
