Investments - Help and advice with changing funds sought please

Woggy67

Hi,

I am looking for some advice regarding fund choices for existing investments. Over the past few years I have managed to save into some stocks and shares ISAs. However, the credit crunch has brought home the need to make my investments work harder. In recently reviewing the funds held in my ISAs I noticed sadly that many seem to be performing very badly and to have lost value considerably.

I have started by transferring my investments over to Hargreaves Landsdown (H-L) into a Vantage Account. I now have the opportunity to keep an eye on them and move from my existing funds to different ones for free. H-L’s website recommends a top 150 funds, based on their own research. However, I wanted to make sure that the funds I am interested in moving to are in the top quartile and preferably in the top 10 funds of their sector. I cannot seem to access this information at such a basic level so that I can understand it. Can anyone suggest an easy way for me to see this type of information please? Perhaps there is even a site where I can put in the fund I hold and the one I am interested in and it compares the two against each other?

I am really looking to find just basic information as I am not really versed in all the jargon etc. I just want to choose better funds that are likely to be in a stronger position than the ones I presently hold. Hopefully the funds I choose will then be ready to take advantage of any recovery in the markets and I can recoup my losses.

If anyone can suggest how I can make informed decisions in a not too complicated way that would be really helpful. My aim is to replace the funds I have with better ones that will hopefully perform better.

For interest the funds I hold are listed on the left. The ones I am looking to change to are listed on the right below, just in case anyone wishes to comment as to whether I am doing the right thing.

Aberdeen Japan Growth ---- Neptune Japan Opportunities

Fidelity Wealthbuilder ---- CF JM Finn Global Opportunities

Investec Global Free Enterprise -- Rathbone Global Opportunities

Gartmore China Opportunities ---- First State Greater China Growth

Henderson Asia Pacific Capital Growth ---- Fidelity South East Asia

New Star European Growth ---- Neptune European Opportunities

New Star Fixed Interest ---- Artemis Strategic Bond

New Star UK Alpha ---- M&G recovery

New Star UK Growth ---- Newton Income


Thank you to anyone who takes time to offer their thoughts or advice.

dunstonh

H-L’s website recommends a top 150 funds, based on their own research.

HLs wealth 150 is a marketing tool. It always seems to be a list of best sellers and opinions which are too quick to act on (I would disagree with their removal of Gartmore China Opps based on a very short period of not as strong performance despite a strong record and being an early in the region compared to others)

I wanted to make sure that the funds I am interested in moving to are in the top quartile and preferably in the top 10 funds of their sector.

Over what period? Some of the best funds for future potential could be 4th quartile in the short term history. You also have to compare risks with the same funds (often a reason for diference is more due to the risk differences than the fund or manager).

turbobob

Might be useful to include the weightings you were thinking of for each fund. Are you going for any particular ratio to each asset class (e.g. a certain percentage in fixed interest, a percentage in UK equities, developed overseas equities, emerging markets, that type of thing). It looks a pretty high risk portfolio TBH.

Something to think about is that a top quartile performer in the good times is often there because it's making risky investments. The JM Finn fund is a good example of this - it was heavily weighted to natural resources and emerging markets and so did very well up to 2008. It was IIRC very much at the top of the "Global Growth" sector. But look what happened later last year (yes, I've got some in that...). The Global Growth sector includes far more general funds, which would have not been in the top ten in the bull market. But on the other hand have not crashed quite so spectacularly as that fund in the bad times...

thrupence

Woggy67 wrote: »

Hi,

Aberdeen Japan Growth ---- Neptune Japan Opportunities

Fidelity Wealthbuilder ---- CF JM Finn Global Opportunities

Investec Global Free Enterprise -- Rathbone Global Opportunities

Gartmore China Opportunities ---- First State Greater China Growth

Henderson Asia Pacific Capital Growth ---- Fidelity South East Asia

New Star European Growth ---- Neptune European Opportunities

New Star Fixed Interest ---- Artemis Strategic Bond

New Star UK Alpha ---- M&G recovery

New Star UK Growth ---- Newton Income


Thank you to anyone who takes time to offer their thoughts or advice.

The First State Greater China Growth is a very good fund with a top notch manager. First State are very good for Asia generally, so you might want to look at their Asia Pacific Leaders fund too.

I wouldn't be too sure about Neptune Japan because most of its performance has been achieved by shorting the Topix, so you've no indication that the manager will be a good stock picker during a recovery.

I like Neptune Russia and Neptune China and also JPM New Europe, if you're feeling adventurous.

You can screen funds using:

Morningstar
Citywire
Trustnet
Bestinvest

Anything that's getting good scores on those will at least be reasonably well managed.

Myrmidon_J

Woggy67 wrote:

I wanted to make sure that the funds I am interested in moving to are in the top quartile and preferably in the top 10 funds of their sector.

dunstonh wrote:

Over what period? Some of the best funds for future potential could be 4th quartile in the short term history. You also have to compare risks with the same funds (often a reason for diference is more due to the risk differences than the fund or manager).

As Dunstonh says, funds in the 4th quartile might be best placed for future growth... Similarly, funds in the top quartile might be set up for a huge fall. I think it's important to consider consistency of returns as well as performance over, say, one year.

triplea35

On the subject of switching funds around in a H-L ISA/SIPP account. Is there any penalty for doing so? I appreciate most of the normal intial charge on funds is not payable but what about the annual management charge. Are these charged on a daily/monthly/yearly basis. is it possible to switch funds around with no financial penaly? Thanks

thrupence

triplea35 wrote: »

On the subject of switching funds around in a H-L ISA/SIPP account. Is there any penalty for doing so? I appreciate most of the normal intial charge on funds is not payable but what about the annual management charge. Are these charged on a daily/monthly/yearly basis. is it possible to switch funds around with no financial penaly? Thanks

I've switched quite a few funds over the past months without any penalty. I suppose they must charge the amc at certain times of the year when the divs are paid, so maybe you could nip in and out of your funds and never pay anything :rolleyes:

dunstonh

amcs are reflected in the unit price or income distributions on a daily basis.

ozzage

I believe the AMCs are charged on a daily basis - somebody can probably confirm/refute that to be 100% sure.

Edit: And indeed somebody has just before I did :P

thrupence

dunstonh wrote: »

amcs are reflected in the unit price or income distributions on a daily basis.

What about performance fees?

Surely they can't be charged on a daily basis.

dunstonh

Edit: And indeed somebody has just before I did :P

I have a habit of doing that.

What about performance fees?

Surely they can't be charged on a daily basis.

It depends on the fund. As most funds dont have performance fees, its not an issue. However, those that do publish it so its not hard to find.