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Enhanced Disclosure of Fund Charges

Aviva Investors actively promote the understanding of the nature of charges, costs and transparency, which is in line with Investment Management Association IMA recommended practice.

When investors use funds to invest in financial markets they are charged for the running of those funds. All such fund charges are disclosed in a standard format in the key investor information document (KIID) and additional information can be found in the Supplementary Information Document.

In common with other types of investors in financial markets, funds incur costs as a necessary part of buying and selling underlying investments in order to achieve the investment objective. These transaction costs affect a fund’s investors in different ways depending on whether they are joining, leaving or continuing with their investment in the fund.

The table below explains what these charges may be and states the charges applicable to our funds or where details can be found.

Please click here to see our fund charges table

Entry charge / Initial Charge This is the maximum charge that the manager may take from your money before it is invested. For example, if you invest £1,000, an entry charge of 5% means £950 of your money is used to buy shares/units in your chosen fund. The charge is used to cover the costs of setting up your investment. For dual priced funds, the initial charge is included in the price you pay to invest, and makes up part of the bid-offer spread. In most cases the initial charge is waived.
Exit charge Some fund managers choose to take a charge when you sell your investment instead of or in addition to an initial charge in order to cover their costs. Aviva Investors do not operate any exit charges on our funds currently.
Ongoing charges This figure is a percentage of the fund value and is based on actual charges for the previous year, but can be an estimate of upcoming expenses where this provides a better indication of the expected charges in the fund. It covers all aspects of operating the fund during the year, including fees paid for investment management, administration and the independent oversight functions. It excludes performance fees and portfolio transaction costs. Where the fund invests in other funds it includes the impact of the charges made in those other funds.
Performance fee Most of our funds do not have a performance fee. Details of any performance fee are given in the Key Investor Information Document for the funds. Full details of how the performance fee would be calculated can be found in the fund's prospectus, where applicable.

Broker Commissions

The fee paid to a broker to execute a trade, based on number of shares traded.

On average, over the last three financial years the fund(s) incurred broker commissions as shown in the table below, as a necessary part of buying and selling the fund's underling investments in order to achieve the investment objective.

Portfolio Transaction Costs.

Comparing portfolio transaction costs for a range of funds may give a false impression of the relative costs of investing in them for the following reasons

- Transaction costs do not necessarily reduce returns. The net impact of dealing is the combination of the effectiveness of the manager’s investment decisions in improving returns and the associated costs of investment.

- Historic transaction costs are not an effective indicator of the future impact on performance.

- Transaction costs for buying and selling investments due to other investors joining or leaving the fund may be recovered from those investors for large trades, see the prospectus for further information.

- Transaction costs vary from country to country.

- Transaction costs vary depending on the types of investment in which a fund invests.

- As the manager’s investment decisions are not predictable, transaction costs are also not predictable.

Dealing Spread

Dealing spread is the difference between the prices at which the underlying investments are bought and sold in the market.

There is a dealing spread between the buying and selling prices of the underlying investments. Unlike shares other types of investments (such as bonds, money market instruments, derivatives) have no separately identifiable transaction costs, these costs form part of the dealing spread. Dealing spreads vary considerably depending on the transaction value and market sentiment. The estimated average dealing spread for each fund is shown in the table below as a percentage of the transaction value.

Stamp Duty Reserve Tax (SDRT)

During the last financial year, the fund incurred stamp duty reserve tax as shown in the table below as a result of investors joining and leaving the fund. For large transactions we reserve the right to recover the SDRT costs to protect other investors in the fund.

SDRT is a tax on agreements to transfer chargeable securities, which include stocks, shares and certain loan capital. Currently SDRT is charged at a rate of 0.5%. The fund is required to pay SDRT as a result of investors joining and leaving the fund, in proportion to the amount that the fund has invested in UK equities.

Pricing policy note
For funds where we operate a dual pricing methodology, where the fund is experiencing net contributions these take place on an offer pricing basis and net withdrawals take place at the bid basis. On an offer basis the prices from buying and selling are calculated by reference to the buying prices of the underlying investments, the creation price. On a Bid basis the buying and selling prices are calculated by reference to the selling prices of the underlying investments, the cancellation price. This means that, when investments are bought or sold as a result of other investors joining or leaving the fund, your investment is protected from the costs of these transactions.

For funds where we operate a single pricing methodology we reserve the right to charge a dilution levy (Investor Protection Fee) to protect your investment from the costs of buying or selling investments that result from large investors joining or leaving the fund. The amount of any such dilution levy is calculated by reference to the estimated costs of dealing in the underlying investments, including any dealing spreads, broker commissions and stamp duty. When we impose a dilution levy on a particular investor or group of investors, this is paid into the fund and helps to protect your investment from the costs of the resultant transactions. For details of dilution levies applied in a fund historically, and on what values, please see the relevant fund prospectus.

For further information on the Investment Management Association guide on charges and costs please click here