Standard Life Sterling Fund

minsky

Has anyone else been affected by the Standard Life Sterling fund? Last year I had getting on for £100K in equity funds, had a bad feeling about the stock market so switched to a safer fund. Standard Life told me the safest, lowest risk one they offered was the Sterling fund - next to no growth but next to no risk. A safe haven to weather the storm and retain capital.
It began to fall towards the end of last year and yesterday it fell another 5% in one day. And its supposed to be cash, like a deposit account. I've lost over 10 grand. 10 grand of missed holidays, clothes and meals out whilst I saved and 10 grand less for retirement. Meanwhile the fund manager gets a six figure salary and god knows what bonus.

Is there any way I can get my money back?
Mis-selling? Negligence?

dunstonh

And its supposed to be cash, like a deposit account

No its not.

I've lost over 10 grand. 10 grand of missed holidays, clothes and meals out whilst I saved and 10 grand less for retirement. Meanwhile the fund manager gets a six figure salary and god knows what bonus.

No sure what your point is there? You are not in a risk free fund and it doesnt offer capital guarantees. It is a low risk fund but not a no risk fund.

Is there any way I can get my money back?

No.

Mis-selling?

Did you receive a recommendation from an IFA telling you to do this and did that adviser tell you that the capital was guaranteed? If so, then you have potential for mis-sale. If you did it off your own back then you should complain to yourself.

Negligence?

almost certainly something didnt go as planned but its unlikely that it would be classed as negligence as they dont offer any guarantees.

purch

yesterday it fell another 5% in one day

Who/What defaulted ??

Cannot think of any reason for a huge sudden drop in a Money Market Fund unless one of it's securities went t*ts up !!!!

minsky

Hi Dunston - the points I was making are:
I have a strong sense of injustice about this - it is not my "fault" for being reckless with the money and its not an "act of god" for which no-one is responsible. In my opinion Standard Life mismanaged the money I entrusted to them.
If this is the lowest risk fund Standard Life could offer me - heaven help anyone else who has a pension. (I have since switched what remains of my money into their managed Cash fund as a temporary measure while I figure out what to do. SL say they cannot guarantee not to lose the money in that fund either).
Its also a warning to others - even investing in the lowest risk pension means you may lose a big chunk of the hard-earned money you put in.

EdInvestor

purch wrote: »

Who/What defaulted ??

Cannot think of any reason for a huge sudden drop in a Money Market Fund unless one of it's securities went t*ts up !!!!

It was revalued on the basis of the worth of the "asset based securities" within.Those American subprime mortgages do get into some very unfortunate places.

EdInvestor

minsky wrote: »

Its also a warning to others - even investing in the lowest risk pension means you may lose a big chunk of the hard-earned money you put in.

If you move to a SIPP you can invest cash in an actual bank account with the usual safeguards. But an ordinary pension will not usually offer this.

purch

According to Standard Life:

"Due to the exceptional market conditions in recent months, there has been limited trading in asset backed securities and this has led to a general downturn in the current market values of these assets. The asset backed securities we hold in the Pension Sterling Fund are high quality assets that we aim to hold to maturity, when we expect them to return their higher ‘par’ value. However, in order to be fair to customers who wish to leave the fund and to those who wish to stay, the value of the current unit price must reflect the presently reduced market values."

The Fund is supposed only to hold short maturity paper, 3 years or so. They seem hopeful that the paper will be redeemed at maturity, so this close to 5% drop is only a mark to market loss.

Sounds pretty steep for such short dated paper.

dunstonh

I have a strong sense of injustice about this - it is not my "fault" for being reckless with the money and its not an "act of god" for which no-one is responsible. In my opinion Standard Life mismanaged the money I entrusted to them.

They certainly haven't done at all well but its not grounds for mis-sale. Mis-sale is when you are advised to do something that is not right for you. From your comments, it sounds like you made the choice to invest in that fund. So, the liability of the decision making lies with you.

If this is the lowest risk fund Standard Life could offer me - heaven help anyone else who has a pension. (I have since switched what remains of my money into their managed Cash fund as a temporary measure while I figure out what to do. SL say they cannot guarantee not to lose the money in that fund either).

You are mistaking what a cash fund is. It is not a deposit account. It can lose money. Theoretically the losses should be rare and small but its not risk free.

Its also a warning to others - even investing in the lowest risk pension means you may lose a big chunk of the hard-earned money you put in.

Not true. Your problem is that you went in the lowest risk option that your provider and plan offered. However, its not the lowest risk option available. I am no fan of Standard Life and what has happened is just another reason why I haven't used them for the last 5 years but it appears that part of the problem here is your lack of understanding.

As Ed says above, if you want cash as in savings account then you need to have a SIPP or a high quality personal pension (Standard Life dont offer a quality SIPP and dont have a high quality personal pension).

cogito

'It is primarily designed for investors who are looking for a temporary home for their money when the short-term outlook for equities,fixed interest securities and property is uncertain.'

I have a small amount in this fund as I have been putting recent contributions into it until I came to a view about the direction of the markets. It is effectively represented as an equivalent to cash when clearly, now, it is not.

I am accustomed to the value of my funds fluctuating by hundreds or even thousands of pounds in a day and do not have a particular problem with this. However, nothing has hacked me off more that suffering the loss of a mere £130 in this 'safe' fund and I have made Standard Life aware of my feelings. I entirely agree with the OP re this fund.

If there is one consolation, the revaluation is backdated to December 23rd so my January contribution will be recalculated and used to purchase more units. Meanwhile, I am considering putting future contributions nto the SL Timbuktu Special Situations Fund as it would appear to carry less risk than the Sterling fund.

EdGasket

cogito: where did you hear that Standard Life was backdating the revaluation of their sterling fund to 23rd December? I have been hit by quite a big loss but wasn't in it until 6th January.
I switched my pension into Standard Life and selected the Sterling fund initially until the money was transferred. Now I have suffered a fairly hefty loss due to the fall in this fund. My money was transferred in around 6th January. How will I get more units, today's valuation is only showing a big loss ?

cogito

I spoke to them this afternoon and that is what they told me. They said it would take a little time to sort out but it doesn't sound as if you've got anything to worry about.