Gold Ratings & Rock-Bottom Fees

Morningstar has pinpointed 4 Gold-rated ISA-eligible funds with some of the lowest fees in the industry

Alanna Petroff 14 March, 2013 | 6:03PM
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This article is part of the special series, Investing with ISAs.

It’s common knowledge that low fund management fees translate into higher returns for investors over the long run. That is why we at Morningstar have taken the time to pinpoint some of the top-rated, ISA-eligible funds with the lowest fees.

The following two traditional open-end funds were found using Morningstar’s Fund Screener Tool. We searched for ISA-eligible, Gold-rated funds with total expense ratios (TERs) that were at or below 1%. We stipulated that these funds must have a minimum initial investment requirement that was at or below £1,000, and we excluded funds of funds from our search. This is what we found:

Aberforth UK Small Companies Fund (Morningstar Analyst Rating: Gold)
TER: 0.86%
Manager: Management Team

Fidelity MoneyBuilder Income Fund (Morningstar Analyst Rating: Gold)
TER: 1.00%
Manager: Ian Spreadbury

Investment Trusts: A Low-Fee Haven

We also searched for ISA-eligible, Gold-rated closed-end funds with rock bottom fees and found the following two investment trusts:

City of London Investment Trust (CTY) (Morningstar Analyst Rating: Gold)
Ongoing Charges: 0.45%
Manager: Job Curtis

Scottish Mortgage Trust (SMT) (Morningstar Analyst Rating: Gold)
Ongoing Charges: 0.51%
Managers: James Anderson and Tom Slater

Keep in mind that it is sometimes possible to invest in top-rated funds and trusts with even lower fees. This may happen if you invest with a broker who can secure even lower fees for all of its clients. In fact, you can often find good deals and lowered fees around the end of the tax year, when investors are looking to invest money in their ISAs and ISA providers are looking to lure in customers. But the funds listed above were selected because they have some of the lowest fees in the industry which are readily available year-round for all UK investors, regardless of whether they are held inside or outside ISAs.

Investors who are looking to access a diversified portfolio of investments but are looking to pay even lower fees may want to consider exchange-traded funds (ETFs) and exchange-traded products (ETPs)

To read more about top-rated funds with low fees, check out "10 Gold-Rated Funds with the Lowest Fees". 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Aberforth UK Small Companies Acc33,276.72 GBP0.19Rating
City of London Ord427.00 GBX0.95Rating
Fidelity Sust MoneyBuilder Inc A-INC-GBP28.69 GBP-0.35Rating
Scottish Mortgage Ord922.40 GBX1.54Rating

About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.

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