HSBC Islamic Global Equity Index BC or IC

Investment Questions and Chats
#1

Salaam all.

I’ve been doing some research in to the HSBC Islamic Global Index Fund. AJ Bell offers the four investments below, and I am trying to determine the suitable one for me. I know I want an accumulating fund so that rules out BD (FUND:BJLVT96), so it’s between the two IC and BC.

HSBC Islamic Global Equity Index IC GBP - FUND:BDCVVD1
HSBC Islamic Global Equity Index BD GBP - FUND:BJLVT96
HSBC Islamic Global Equity Index BC GBP - FUND:BJLVT85
HSBC Islamic Global Equity Index IC GBP - FUND:BMVDH00

I’ve looked at similar forum posts, and spoke with AJ Bell, but I’m still a bit confused. What I’m trying to understand is what is the difference between the two IC and BC funds (and why are there several options)?

From what I can see, using the AJ Bell cost calculator the difference seems to be with the ongoing cost (there is a 5.54% initial charge for BC GBP FUND:BJLVT85 but I understand from another forum post that this isn’t charged to individual investors);
IC GBP FUND:BDCVVD1 - 0.49%
BC GBP FUND:BJLVT85 - 0.63%
IC GBP FUND:BMVDH00 - 0.58%

Based on this the IC GBP FUND:BDCVVD1 with an ongoing cost of 0.49% would be the best i.e. lowest cost option. I would be grateful if anyone could please comment if that is the correct analysis, or if I’ve missed something?

Thanks - and sorry for the newbie questions!

#2

As-salamu Alaykum Wa Rahmaa Tu’lahi Wa Brakatu,

Gave me a genuine headache but figured it out.

BD = GBP dividend reimbursement (you get the dividends)

BC = GBP dividend accumulated (dividend gets reinvested into your fund)

IC BDCVVD1 = same as BC but in USD

IC BMVDH00 = same as BC but with 0.12% less charge

Depending on your investment style and philosophy, BD and BC serve the same purpose with the exception of where you want the dividends to go, I personally want it to be accumulated so that I can get a compounding effect.

BC is also cheaper than BD.

Let’s now call
“IC BDCVVD1” as “IC-USD”
“IC BMVDH00” as “IC-GBP”

As a UK investor, I’m not concerned about IC-USD because it’s of no consequence.

IC-GBP and BC are the exact same, however, IC-GBP is cheaper per share and on-going costs.

Why is there IC-GBP and BC?
BC was released in 2020
IC-GBP was released in 2021

Why is there two releases?
My guess are the following:

  1. restructuring their Islamic offerings to minimise cost and raise profits or differences in board opinion

  2. exposure to different markets, services, geographies

  3. use of share classes for complicated financial machinery or governance machinery

Sources:

HSBC funds
https://mena.assetmanagement.hsbc.com/api/v1/download/document/lu2288915254/ae/en/factsheet

Share class definitions