Jupiter Absolute Return fund - new launch

Old_Slaphead

I'm in 2 minds about this fund. Given that performance is unlikely to 'take off' I think I'll sit on the sidelines for a few months to see how things pan out.

RayWolfe

NickyDee wrote: »

PS - let's not go off topic and open the can of worms around bankers and bonuses...

My comment was not about bankers but about bonuses.
If the fund manager gets 1.5% of the value each year, why is that not incentive enough for him to do well. As it should be for a banker getting a salary of £1M AND keeping his job if he does well, just like me who gets a salary AND the sack if I don't do well?
I do not understand the extra incentivisation NEEDED in some types of fund. If we go along with it it will soon apply to all funds. So I, for one, am standing my ground and won't have anything to do with fee+ funds.

StevieJ

RayWolfe wrote: »

My comment was not about bankers but about bonuses.
If the fund manager gets 1.5% of the value each year, why is that not incentive enough for him to do well. As it should be for a banker getting a salary of £1M AND keeping his job if he does well, just like me who gets a salary AND the sack if I don't do well?
I do not understand the extra incentivisation NEEDED in some types of fund. If we go along with it it will soon apply to all funds. So I, for one, am standing my ground and won't have anything to do with fee+ funds.

Don't mind if it was just the bonus i.e. performance related, now that would make them pull their finger out

Old_Slaphead

If they get a bonus for outperformance should they not be penalised (ie AMC rebated) for underachieving?

Gotta say I'm now with you on this one Ray

Rollinghome

I can understand why they're all eager to jump on this band-wagon - they can't believe their luck. They typically get about 1% pa in management fees with the other 0.5% going to the adviser. With this sort of deal they only have to return 7%, or just over a miserable 5% with some such as the Black Rock version) to double their fees. As Mr Gibbs says in his video: "Jupiter felt there was a demand for this sort of fund." Would be a shame not to take the money.

The return on absolute return funds has been very variable with an average of 10% over the last year compared with the return on a simple FTSE tracker of closer to 30%. Some have done much better than the average, some much worse, but it seems close to impossible to assess the level of risk involved.

The Blackrock Absolute Alpha fund, which also got the hard-sell from Messrs Hargreaves Lansdown when it came out, gave a decent return intially but has been very pedestrian overall. Seems to me one possible use for these funds is in a bear market when you can't conveniently move to cash, such as with funds in an ISA, but so far they don't seem to have done as well as the better balanced funds.

RayWolfe

Old_Slaphead wrote: »

If they get a bonus for outperformance should they not be penalised (ie AMC rebated) for underachieving?

Now that is good lateral thinking!

RayWolfe

Rollinghome wrote: »

The Blackrock Absolute Alpha fund, which also got the hard-sell from Messrs Hargreaves Lansdown when it came out

This is just about getting unbearable. I remember moaning about the sell, sell, sell with Blackrock, but this one takes the biscuit. Their publications, flyers, emails flogging this are getting on my nerves. I used to think their interests and mine were aligned through their trail commissions but now I think they are on a different tack altogether.
Add Mr Hs THREAT to leave the country that allowed him to become rich beyond the dreams of avarice if he has to pay his share of tax ... but that's just a bee in my bonnet.

Rollinghome

RayWolfe wrote: »

Add Mr Hs THREAT to leave the country that allowed him to become rich beyond the dreams of avarice if he has to pay his share of tax ... but that's just a bee in my bonnet.

:rotfl: I missed that one, but then I never read the barmy egocentic rants he keeps sending me. He must be a terrible embarrassment to the staff there: like a demented old grandpa who won't stay in his room with guests around.

So he's off is he? Proof again that every cloud has a silver lining.

RayWolfe

It was an interview for the Sunday Times where he promised to go.
Yes you do get the grumpy old man impression from his rants in Investment Times, but I still read them to cheer me up and it's easier for me to read how unhappy the reactionaries are, rather than have to go out and pay for an article by Richard Littlejohn.

Gymgenius

Rollinghome wrote: »

I can understand why they're all eager to jump on this band-wagon - they can't believe their luck. They typically get about 1% pa in management fees with the other 0.5% going to the adviser. With this sort of deal they only have to return 7%, or just over a miserable 5% with some such as the Black Rock version) to double their fees. As Mr Gibbs says in his video: "Jupiter felt there was a demand for this sort of fund." Would be a shame not to take the money.

The return on absolute return funds has been very variable with an average of 10% over the last year compared with the return on a simple FTSE tracker of closer to 30%. Some have done much better than the average, some much worse, but it seems close to impossible to assess the level of risk involved.

The Blackrock Absolute Alpha fund, which also got the hard-sell from Messrs Hargreaves Lansdown when it came out, gave a decent return intially but has been very pedestrian overall. Seems to me one possible use for these funds is in a bear market when you can't conveniently move to cash, such as with funds in an ISA, but so far they don't seem to have done as well as the better balanced funds.

This post has helped me to make my mind up not to bother with this new fund.