As it turns 25 Aberdeen UK Tracker Trust slashes fees


#1

Originally published at: http://whichinvestmenttrust.com/as-it-turns-25-aberdeen-uk-tracker-trust-slashes-fees/
Whilst costs haven’t been lowered as much as some rivals the trust has features its competitors lack that just might prove attractive to index investors. Aberdeen UK Tracker Investment Trust (LON:AUKT) is the only investment trust to adopt a passive investment strategy. This means the manager of the £340 million of assets trust doesn’t attempt…


#2

From 6 August 1990 to 30 June 2015 Aberdeen UK Tracker Trust delivered an annualised total return of 8.1%

That’s not a bad little number that and more than I expected. When compounded that’ll add up to a tidy some. Certainly 25 years is a while, but if you’re saving for your retirement maybe not so incredibly long.


#3

I didn’t know there were any investment trust passive funds. Trying to get my head around the concept a little bit because you have the added complication of the discount and it just isn’t as cheap as some of its competitors.

The video from Money Week and Ed Bowsher is obviously quite old because it talks about active fund charges of 1.5% - that’s pre RDR, but the content is still relevant. The writing on the whiteboard he does is unreadable which made me laugh but the video is worth watching if you don’t understand passives because he explains it well.


#4

Looking at the Ongoing charge, something I’ve only recently got my head around, surely passive or tracker Unit Trusts have dealing charges too?

It’s the dealing charges that push up the cost of the Aberdeen trust so do the Unit Trusts just not declare the dealing fees or are they just not factored in to the charges on factsheets?

Also, what about ETFs, the video talks about them too, don’t they have dealing charges?


#5

I took a look at Vanguard and they talk about an Ongoing charge of 0.08%. I assume that this includes the dealing because it’s described an an Ongoing charge.

Does anyone else know any different?


#6

If you use Aberdeen’s own share plan there are no dealing costs when buying shares but you still have to pay 0.5% stamp duty, which ETFs and OEICs don’t. The discount has historically been around 5% so this gives a small uplift to the yield and unlike many trusts there isn’t a revenue reserve, so like unit trusts all income after charges is paid out as dividends.

Not a bad way of getting exposure to the broad market if you use a monthly savings plan to benefit from pound cost averaging.


#7

The investment trust saving schemes are very good value for money. Especially if you invest in a passive fund like this.

The performance of this trust over time looks pretty good. I guess not having to manage flows of investors money has really contributed to this.