Tracker fund with buy/sell price variance

[anonymous-user]

I put a pension transfer into a SIPP about six years ago (from a DB pension with less than two years service, so transferring was the only way to keep the 'employer contributions') and I seem to have put it into a tracker fund that has low ongoing fees but a variance between the buy and sell prices - currently buy for 245p, sell for 233p:

https://www.hl.co.uk/funds/fund-discounts,-prices-...

Was that a stupid move? Seems like I've lost 5% straight away just by choosing that fund instead of a low cost tracker where the buy and sell price is the same.

If so, am I best to move to a fund that isn't going to cost me as much when I sell it? Still got 20 years to go so I'm assuming that 5% at that time is going to be much more money than 5% now. It's doubled in that six years which is nice, and is only £11k, but don't want to needlessly waste money.

[5pen]

Is the SIPP with Hargreaves Lansdown as per your link? If so, the page you've linked states that they discount the initial 5% fee, so the net initial fee is 0%.

[anonymous-user]

Yes but if I buy some today for 245p and sell tomorrow for 233p, I've lost 5% without any movement in the fund. Other trackers seem to have identical buy/sell prices.

[JulianPH]

The whole point is that you don't pay this bid/offer spread as the 5% discount removes it.

[anonymous-user]

Ah okay, that's not really clear from the way the charges/pricing are laid out - I see that the funds where the buy/sell price are the same don't have any initial fees, on the Black Rock one it looks like the buy/sell price and the Initial Charge are separate. I will leave it alone!

[JulianPH]

It is the initial charge that creates the bid/offer spread (or you could say the bid offer spread enables the initial charge).

If the initial charge is fully discounted then this is the same as removing the bid/offer spread.

So they are not separate but the same thing.

BTW, if it wasn't discounted you would have paid this upfront, not when you sell.

Anyway, you haven't paid it!