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Aviva Investors actively promotes the understanding of the nature of charges and costs, and transparency in their disclosure to investors.
All funds are subject to charges and expenses. They are the costs of running the fund, including marketing and distributing it.
The table of fund charges and costs in the link below and the following wording explain what these charges may be and state the charges applicable to our funds or where details can be found.
Table of fund charges and costs
What are ongoing charges?
Ongoing Charges are fees taken from a fund annually for managing and administering operational aspects of a fund. They are calculated and shown as a percentage. The charge is generally based on the historic costs of managing a fund throughout the year, although it may be based on an estimate of upcoming costs where this provides a better indication of the expected costs. The ongoing charge is made up of a fund management fee* (FMF) and, where a fund invests a substantial portion of its assets in other funds, a pro-rated amount for the charges of those other funds. The daily price of shares / units in a fund will already reflect the deduction of the ongoing charges. Ongoing Charges are fees taken from a fund annually for managing and administering operational aspects of a fund. They are calculated and shown as a percentage.
*The fund management fee is a single fixed rate charge to cover underlying costs of managing the fund.
Portfolio transaction costs
These are the expenses incurred by the fund when buying and selling assets on behalf of its investors. They can either be for investing in assets directly or for purchasing another fund which would have their own underlying costs for transactions. Portfolio transaction costs can be split into explicit (direct), implicit and indirect transaction costs. For further information on the components of transactions costs and a brief summary, please see the summary details below or by accessing the Aviva Investors Costs and Charges Q&A at the bottom of the page.
Explicit transaction costs
Also referred to as direct transaction costs these are cash payments incurred when the fund buys and sells investments, and which reduce fund returns. These costs are separate from the ongoing charge and include broker commission (fee paid to a broker to execute a trade) and taxes. The transaction costs are the result of decisions made by the fund manager to buy and sell investments with the strategic aim of benefitting the portfolio and improving returns to achieve the objective of a fund.
Implicit transaction costs
Also referred to as indirect transaction costs these costs are different to direct costs as there is no specific cash payment, but these costs do have an impact on the performance of a fund. Indirect costs are made up of Dealing/Issue to cancellation spreads and Dilution.
Indirect transaction costs
Indirect transaction costs are incurred when funds invest into other funds. The other funds will have their own costs and charges for buying and selling assets that are passed on to investors. In this circumstance, these costs will be passed to the purchasing fund. This charging structure works in the same way when transaction costs are passed to investors of Fund, however in this instance, the investor would be another Fund. These costs will generally be the same combination of explicit and implicit and indirect costs as calculated by the managers of the other funds. These costs are combined to total the indirect transaction costs which would be passed on to investors.
Dealing spread/Issue to cancellation spread
The dealing spread is relevant to the single priced funds and represents the difference between the buying and selling price of the underlying investments. The Issue to cancellation spread is relevant to the dual priced funds. The Issue to cancellation spread is the difference between the issue price and the cancellation price.
Dilution
We operate a dual pricing methodology for certain funds. This means that when such a fund is experiencing net inflows, buying and selling shares/units takes place on an offer pricing basis, calculated by reference to the price of buying the underlying investments (the creation or issue price). However, when that fund is experiencing net redemptions, buying and selling shares/units takes place on a bid pricing basis, calculated by reference to the price of selling 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 fully protected from the costs of these transactions as dilution is addressed within the price.
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. For details of dilution levies applied in a fund historically, and on what values, please see that fund's Prospectus.
None of our funds currently have a performance or exit fee. We also do not impose an entry charge on any of our funds other than the Aviva Investors US Equity Income Fund.
The table below shows how fund charges can impact investment returns
| Fund Name | A | B |
| Amount Invested (£) | £10,000 | £10,000 |
| Entry Charge | 0.00% | 5.00% (£500) |
| Ongoing charge | 0.2% (£20) | 0.9% (£90) |
| Direct transaction costs | 0.05% (£5) | 0.18% (£18) |
| Total Costs | £25 | £608 |
| Balance | £9,975 | £9,392 |
Please note that the above illustration is over a 12-month period and assumes the amount invested stayed the same over the period, fund performance has not been included, this could have either a positive or negative impact on returns. The entry charge for fund B is a one-off cost.
For more information on our transaction costs please see our costs and charges Q&A
Other resources
Download the latest KIID, Report & Accounts and other literature here for each of our funds.
Further guidance
Further guidance on fund charges and costs can be found on the Investment Association’s website by clicking here .
Disclosure related to alternative methodology used in implicit transaction cost calculations
Implicit costs may be positive or negative. Where an implicit cost in a fund is positive i.e. a gain, this has been reduced to zero, as we believe it would be confusing to disclose a gain.
For Fixed Income transactions (including exchange traded derivatives of this asset class) the calculation of implicit costs is completed by comparing the mid-market price as at the execution time of our transaction against the execution price that we achieved for that transaction. We feel that this calculation methodology is more accurate than comparing the mid-market price at the time a transaction is instructed (“arrival price”) against the execution price that we achieved for that transaction. For Foreign Exchange (FX) transactions (including exchange traded derivatives of this asset class) basis points based on the liquidity of the relevant currency pair being traded are used to calculate implicit costs. We feel that this calculation methodology is more accurate than comparing the mid-market arrival price at the time a transaction is instructed against the execution price that we achieved for that transaction. For OTC (Over-The-Counter) derivatives, where there is no ready means of determining the price when the trade is instructed, the cost is the average of the observed cost of the transaction. These costs represent the Regulator’s view of the opportunity cost of the transaction, and do not represent any cash payment made by the fund. Implicit costs may be positive or negative. Where an implicit cost in a fund is positive i.e. a gain, this has been reduced to zero, as we believe it would be confusing to disclose a gain.
For further explanation of implicit transactions costs please see the Costs and Charges Q&A, below on this page.
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