Trading costs and dividends

Trading costs

Each order in a test pays 0.05% of its value in trading costs (4.5 basis points of slippage and 0.5 of commission), so a buy and a sell together cost 0.1%, or 10 basis points.

Choose an amount and a broker in the composer and the test uses that broker's published charges instead, such as a fee per deal or a currency fee, with whole or part shares as the broker allows.

Dividends

Returns are total return: each dividend is credited on its ex-dividend date to the shares held at the previous close, after withholding tax, and reinvested at that day's close (through the rebalance on a rebalance day, otherwise in the paying holding). Cash receives no dividends. The buy-and-hold benchmarks are total return too.

Tax taken from dividends

Dividend withholding is a UK-resident investor's default, deducted at source: UK shares 0%, US 15% (with a W-8BEN), and each European country's own rate before any treaty reclaim (Germany 26.375%, France 25%, Italy 26%, Spain 19%, Switzerland 35%, Netherlands 15%). Rates that depend on paperwork are flagged on the Strategy Agent's result card.

UK stamp duty

Stamp duty is deducted on purchases, never on sales: 0.5% on UK-incorporated shares (UK stamp duty reserve tax) and 1% on Irish-incorporated ones. ETFs pay none, and London lines of companies incorporated elsewhere are treated as paying none.

Testing UK and European shares shows a stored test with the stamp duty it paid.

Shares in another currency

If your account is in pounds and the shares are priced in dollars or euros, the engine values the holding in pounds at each day's exchange rate, and converts every purchase, sale and dividend at that day's rate. The rates are the Federal Reserve's daily rates. The rule itself reads the shares' own prices.

Cash

Cash the rule holds earns a stated interest rate, and the result says which rate it used.