Standard Life Sterling Fund

cogito

Standard Life changed the literature on their website (for the Sterling and Managed Cash funds) on a daily basis last week.

That does not surprise me. When I received SL's letter, I looked at the factsheet and could not believe that I had put money into such a fund.

I also think that the so-called 'Managed Cash' fund - launched only recently by Standard Life - is the most cynical, snidey proposition imaginable.

Hard to disagree. Why now if not because of issues with the Sterling fund? I fully intend to ask Standard Life for compensation failing which I will take it up with the FSA. I may only have lost a small amount - less than the daily fluctuation in my fund - but I consider that there is an important principle at stake.

BTW - could this thread be made a 'sticky'?

RoxFox100

It sounds like several posters may have a case against Std Life or their IFA for mis-selling though the hurdles can be daunting. Some will likely succeed, many will not. But it is playing their game to seek compensation on an individual basis.

All customers have a moral case for compensation, and if the loss is as reported in the Daily Mail it is a drop in the ocean to Std Life

We are their CUSTOMERS for goodness sake, they have screwed up. Simple as that.

We need to SHAME Std Life into full restitution for all

dunstonh

It sounds like several posters may have a case against Std Life or their IFA for mis-selling though the hurdles can be daunting. Some will likely succeed, many will not. But it is playing their game to seek compensation on an individual basis.

I doubt any case against an IFA would succeed as we know its not risk free and would not be the same as cash in an account. We just wouldnt put it in that risk category.

All customers have a moral case for compensation

Even those that knew it was not risk free and the same as cash?

Jennifer_Jane

RoxFox100 wrote: »

It sounds like several posters may have a case against Std Life or their IFA for mis-selling though the hurdles can be daunting. Some will likely succeed, many will not. But it is playing their game to seek compensation on an individual basis.

All customers have a moral case for compensation, and if the loss is as reported in the Daily Mail it is a drop in the ocean to Std Life

We are their CUSTOMERS for goodness sake, they have screwed up. Simple as that.

We need to SHAME Std Life into full restitution for all

I'd also be interestd to hear what these posters' experiences are with their own Pension Fund Trustees, and what they have to say about this.

Jen
x

EdInvestor

Mail on Sunday report.Not the first time the fund has had a wobble, it seems.

http://www.dailymail.co.uk/money/article-1120642/Low-risk-Standard-Life-pension-fund-loses-100m.html

Thalang

I have a breakdown from Standard Life Investments of the underlying fund assets. This gives the percentage weighted to asset backed securities (ABS) as 44.27%, 30% of which (so just under 13% of the total) is allocated to non-conforming residential mortgage backed securities. 44.57% of the ABS is in prime mortgage backed securties (so 19.73% of the total) and almost all the rest of the ABS is in commercial mortgage backed securities.

Don't forget that the the popular notion of cash as risk free is far from the truth. The technical definition of the 'risk free rate of return' (RFR) is short term Gov't bonds, not cash. It follows that any return over the RFR involves the assumption of additional risk. Equally, investment risk is only one of many risk factors that should be considered when making an investment.

Part of the question here, IMHO, is whether the risk of the fund has drifted upwards over time, as allegedly happened with the now infamous AIG premier bond 'cash' fund. If there is no parallel revision of the fund'' documentation that explains the true make-up of the fund, then it may be that Standard Life can be held to account.

Please note that I am financial planner. This post is not a substitute for, nor does it constitute, advice or recommendations.

artha

Thalang wrote: »

Don't forget that the the popular notion of cash as risk free is far from the truth. The technical definition of the 'risk free rate of return' (RFR) is short term Gov't bonds, not cash.

Please note that I am financial planner. This post is not a substitute for, nor does it constitute, advice or recommendations.

How do long term government bonds stack up as RFR?

PaulLondon_3

In last weeks letter from Standard Life announcing the 5% reduction in the value of the Sterling Fund, they "suggested" an alternative home for people who want a safe home and they have made available a "Managed cash Fund". The Fact Sheet states this fund is invested as follows: Call Deposits, 52%; Government Bills, 24% and Certificates of Deposit, 24%.

It is not clear to me exactly what this fund is invested in (and with the recent experience of the Sterling Fund which apparently invested in risky US mortgage backed securities, I am proceeding with a lot more caution). I received more information as to what this fund is invested in and these are the top 10 holdings:

Rating Split
Aaa 23%
A-1+ 51%
A-1 26%
Source: SLI, as at 05/01/09

Top 10 Holdings as at 28/11/08

UK Treasury Bills - T Bills - 14.25%
UK treasury Bills - T Bills - 14.25%
BNP PARIBAS - Deposits - 4.60%
RABO BANK INTER - Deposits - 4.60%
LLOYDS TSB FINANCIAL MARKETS - Deposits - 4.60%
HSBC BANK PLC - Deposits - 4.59%
ABBEY NATIONAL TREASURY PLC - Deposits - 4.59%
BANK OF IRELAND GLOBAL MARKETS - Deposits - 4.59%
SOCIETE GENERALE - Deposits - 4.33%
DANSKE BANK AS - Deposits - 4.33%


Does anyone have any views about the relative "safety" of this new Managed Cash Fund? Is it a genuine "safe" place to put a pension pot just prior to buying an annuity, or is it another "Sterling Fund in the making?

Thanks

wonderman

This looks a lot more like I would expect a "cash" fund to be.

The problem with the sterling fund is that it is invested in Asset Backed Securities (mortgages) and these are now illiquid - they have no real value at all - they may be worth a $1 or $100. Despite the fact that the borrowers may not have defaulted there is virtually no market for them. I am not quite sure how SL arrived at a 5% mark down - they could equally have decided to mark these assets down to zero and put a 40% hit on the fund. Who is to say that another 5% is not coming next week?

cogito

wonderman wrote: »

This looks a lot more like I would expect a "cash" fund to be.

The problem with the sterling fund is that it is invested in Asset Backed Securities (mortgages) and these are now illiquid - they have no real value at all - they may be worth a $1 or $100. Despite the fact that the borrowers may not have defaulted there is virtually no market for them. I am not quite sure how SL arrived at a 5% mark down - they could equally have decided to mark these assets down to zero and put a 40% hit on the fund. Who is to say that another 5% is not coming next week?

Exactly the reason why I've sold my units.