Fidelity China Special Situations fund

MrMajic

I know very little about trading/ISAs but am considering putting between £300-£500 per month into a fund such as this one. My aim is to beat the investment cost of paying money off of our mortgage at 4.59%. I understand that there is an inherent risk in trading like this, but would welcome views from anyone who knows a bit about this sort of thing.

Thanks.

Reaper

Anthony Bolton has a legendary status as a fund manager. However many think this is not a good time to get into China. If you want to go ahead I would suggest spreading the risk by getting a mixture of funds bought through discount brokers.

Remember you also have the option of using a S&S ISA.

MrMajic

Reaper wrote: »

Anthony Bolton has a legendary status as a fund manager. However many think this is not a good time to get into China. If you want to go ahead I would suggest spreading the risk by getting a mixture of funds bought through discount brokers.

Remember you also have the option of using a S&S ISA.

Thanks, Hargreaves Lansdown offer the fund as one of their choices, so if I buy it from them am I correct in reading that there's no initial charge?

I take your point about spreading the risk - there are so many funds though I don't really know where to start. Do H-L advise on which funds to invest in and still not charge the initial fee?

Rollinghome

Very important to understand that this is an Investment Trust which is a very different beast to a unit trust although Fidelity don't seem to be making the distinction very clear. H-L will sell it because they'll get a new launch fee.

The general rule is never, never subscribe to a new investment trust. New ITs in specific areas tend to be cynically launched at the peak of markets and almost always go to a discount at some point. Which means that even if the underlying assets appreciate your investment could be worth significantly less. Usually the better way is to wait till it goes to a discount and then buy. Of course, this fund might be the very rare exception and go to a premium.

MrMajic

Rollinghome wrote: »

Very important to understand that this is an Investment Trust which is a very different beast to a unit trust although Fidelity don't seem to be making the distinction very clear. H-L will sell it because they'll get a new launch fee.

The general rule is never, never subscribe to a new investment trust. New ITs in specific areas tend to be cynically launched at the peak of markets and almost always go to a discount at some point. Which means that even if the underlying assets appreciate your investment could be worth significantly less. Usually the better way is to wait till it goes to a discount and then buy. Of course, this fund might be the very rare exception and go to a premium.

Thanks, I didn't know that! Perhaps I'll look for something a little safer. What sort of return could I reasonably expect per year?

Rollinghome

MrMajic wrote: »

Thanks, I didn't know that! Perhaps I'll look for something a little safer. What sort of return could I reasonably expect per year?

In answer to your earlier question H-L recommend funds, often without the reason being clear, but don't suggest portfolios as such. Chelsea Financial Services do suggest what they call model portfolios in their magazine at http://www.chelseafs.co.uk. You don't have to buy from them of course and should treat it as only a starting point.

The return you get depends on the risk you're prepared to accept in choosing your investments. The riskier the investment the higher the return you might expect, but of course possibly not get. The historic real (after inflation) total return on UK equities (but before costs) has been around 5.1% and the world average about 5.2%.

Your best bet might be to get a couple of reliable books such as:

• The Financial Times Guide to Investing £12.49 http://www.amazon.co.uk/exec/obidos/ASIN/027372374X - describes the pros and cons of a wide range of investments. New edition.
• Smarter Investing - Financial Times series £9.99 http://www.amazon.co.uk/exec/obidos/ASIN/0273722077 - about setting financial goals and how to get there.
• Save and Invest - "Which?" Essential Guides series £6.13 http://www.amazon.co.uk/exec/obidos/ASIN/1844900444 - basic easy read.
• Be Your Own Financial Adviser - Financial Times series £9.99 http://www.amazon.co.uk/exec/obidos/ASIN/0273727796 - new edition available April.

Reaper

MrMajic wrote: »

I take your point about spreading the risk - there are so many funds though I don't really know where to start. Do H-L advise on which funds to invest in and still not charge the initial fee?

As you have probably seen on their web site they have their "Wealth 150" which is their top 150 funds. That is still a lot to choose from. If you have an idea what sectors to go into (eg Emerging Markets, Natural Resources etc) then that ought to help you come up with a short list.

If not there are "Multi-manager funds" where they make the decisions about which funds to put it in for you and you just choose low risk, medium risk etc. I'm not a great fan as you pay 2 sets of charges but if you get really stuck then they are an option.

MrMajic

Rollinghome wrote: »

In answer to your earlier question H-L recommend funds, often without the reason being clear, but don't suggest portfolios as such. Chelsea Financial Services do suggest what they call model portfolios in their magazine at http://www.chelseafs.co.uk. You don't have to buy from them of course and should treat it as only a starting point.

The return you get depends on the risk you're prepared to accept in choosing your investments. The riskier the investment the higher the return you might expect, but of course possibly not get. The historic real (after inflation) total return on UK equities (but before costs) has been around 5.1% and the world average about 5.2%.

Your best bet might be to get a couple of reliable books such as:

• The Financial Times Guide to Investing £12.49 http://www.amazon.co.uk/exec/obidos/ASIN/027372374X - describes the pros and cons of a wide range of investments. New edition.
• Smarter Investing - Financial Times series £9.99 http://www.amazon.co.uk/exec/obidos/ASIN/0273722077 - about setting financial goals and how to get there.
• Save and Invest - "Which?" Essential Guides series £6.13 http://www.amazon.co.uk/exec/obidos/ASIN/1844900444 - basic easy read.
• Be Your Own Financial Adviser - Financial Times series £9.99 http://www.amazon.co.uk/exec/obidos/ASIN/0273727796 - new edition available April.

Great, thanks for the advice there, much appreciated.

MrMajic

Reaper wrote: »

As you have probably seen on their web site they have their "Wealth 150" which is their top 150 funds. That is still a lot to choose from. If you have an idea what sectors to go into (eg Emerging Markets, Natural Resources etc) then that ought to help you come up with a short list.

If not there are "Multi-manager funds" where they make the decisions about which funds to put it in for you and you just choose low risk, medium risk etc. I'm not a great fan as you pay 2 sets of charges but if you get really stuck then they are an option.

Thanks, I expect I'll pick one of the 150, as you say, it's a good starting point.

Rollinghome

You might like to also look at the research and evaluation of funds at http://www.morningstar.co.uk/uk/fundquickrank/default.aspx?lang=en-GB, various tools, and also at http://www.trustnet.com. Initially it sounds more complicated than it really is so take your time.

sheslookinhot

MrMajic wrote: »

I know very little about trading/ISAs but am considering putting between £300-£500 per month into a fund such as this one. My aim is to beat the investment cost of paying money off of our mortgage at 4.59%. I understand that there is an inherent risk in trading like this, but would welcome views from anyone who knows a bit about this sort of thing.

Thanks.

On that basis, perhaps an hour with an IFA would be appropriate, otherwise its hit or miss.