I believe I know the answer but finding it hard to find confirmation, so asking the experts, what is the difference between the T or I class Fundsmith Equity fund?
The T shares appear to be the accumulation shares and the I shares the income shares: dividends in the underlying investments of the T shares are reinvested, and those in the I shares paid out to the holder.
Shipoffrogs, thanks for the answer however its still not obvious. There are 4 types of Fund
I think the I will stand for institutional investors normally available through platforms like Hargreaves and AJ Bell etc normally a cheaper share class where the T will be for retail investors and generally a higher more expensive ocf charge.
I class is a smaller fee - with IWEB I had to buy the T class - AJ Bell its the I class - in fact you cant buy the T class with AJ Bell due to being more expensive fees... Additionally I think its a min of £5m to buy the I class...
There's actually 3 classes, each available as acc and inc
I is institutional with higher min deposits and lower fees but is available to us if bought via some brokers
R is I believe retail but has higher fees and I think was only bought in particular circumstances
T is the normal retail fund that you get if you invest directly
As highlighted by beatingmrindex and doug2500, the I class has smaller fees, so this means they has grown more than the T class shares.
Here are todays price for each share class (they all started at 100p in Oct 2010)
| Share Class | OCF* | Minimum | Price p |
|---|---|---|---|
| T Class Acc | 1.05% | £1,000 | 617.23 |
| T Class Inc | 1.05% | £1,000 | 563.52 |
| R Class Acc | 1.55% | £1,000 | 583.55 |
| R Class Inc | 1.55% | £1,000 | 556.76 |
| I Class Acc | 0.95% | £5M | 624.16 |
| I Class Inc | 0.95% | £5M | 563.96 |
https://www.fundsmith.co.uk/fa...
So if you can, definitely invest in the ("more expensive") I class shares instead of the T class shares as they will grow (slightly) faster.
@beatingmrindex I hold the I Class shares in my IWeb aacount, so it seems strange that you only had the options to get the T class shares
Most decent sized platforms will have access to I (institutional) class shares.
With regards to the 5 mil minimum they will just bundle up together thousands of daily private/DFM trades in the fund to meet that minimum figure.
It sounds a lot but given I think the fund is near 29 billion in size 5 million traded daily as a minimum is a drop in the ocean.
I think the 5M is initial investment and subsequent top ups can be smaller. I'm sure this is the same for R & T as well.
Many thanks for everyone taking the time to respond.
I thought I knew the answer but I definitely didn't.
AJB allow the option for the I ACC, so that is what I have now bought.
It makes a decent comparison of the effects of higher fees compounded over the years because that's the only difference between the classes and look at the difference in values. A good lesson for anyone that thinks a bit of a percent here and there isn't worth worrying about, it compounds along the years to significant value.
