BMO Commercial Property Trust plc BCPT

This trust invests in commercial property, like offices, retail property and industrial sites.

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Freetrade’s charges for BCPT are too high:

Ongoing charges 2.4316%
Transaction costs 0.1082%
Incidental costs 0.0000%

I am interested to know why Freetrade levied 2.43% ongoing charge.

Currently the div is 5.46%.

Won’t this reduce dividend payouts by 2.43% to a paltry 3.03%?

Why is the ongoing charge so high?

You have to ask BCPT, the ongoing charge is nothing to do with Freetrade

According to the annual report the ongoing charge is 1.19%, so perhaps Freetrade need to update their data base. However, that doesn’t mean Freetrade are taking a fee or anything like that, the ongoing charge is reflected in the share price and as stated in the annual report is used by BCPT to cover their costs.

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Hi,

Thank-you for explaining this. Wish Freetrade would update their dB.

Do you know at which point is the OC deducted? When a share is bought and paid for, or somewhere else?

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The ongoing charge is an annual management fee that is deducted from the value of the fund before the profits ever reach you. It’s kind of invisible, you won’t see it as an explicit deduction like an amount of money removed from your account. Instead, your return on investment is just lower than it otherwise would have been.

Investment trusts tend to have quite high charges. They claim that even after the charges are deducted, you as the investor are still benefiting from their expert management. Other people argue that index tracker ETFs are better, because they tend to be much cheaper and the expert managers that you pay for with an investment trust don’t actually add as much value as they say they do. You might want to shop around and see for yourself which group you believe. I’m in the ‘low cost ETF’ camp myself, so I suggest trying justetf.com and Low-cost index trackers that will save you money - Monevator for ideas.

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Hi,

the ongoing costs for BCPT are listed on the Key Information Document
https://www.bmogam.com/gb-en/retail/wp-content/uploads/2019/11/l123-bmo-commercial-property-trust.pdf ,which lists 2.43%.

Interesting because it says 1.19% in the annual report on page 6

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Weird. I don’t get it.

I would assume the KID is the truth but I suppose you could contact them and find out for sure.

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I get these every month in my ISA, it would be good to be able reinvest these back in. We used to be able to but then it just stopped.

As Freetrade already have to deal with the withheld tax for my holding it would make sense to be able to buy more of what I have if I want to.

Any updates would be appreciated.