Fidelity China Special Situations fund

Rollinghome

sheslookinhot wrote: »

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

It could be an option but bear in mind most commission-based IFAs wouldn't know an IT if it poked them in the eye, for small amounts will want front-end commission in addition to the trail commission from UTs, and tend to flog whatever pays a decent commission. Unfortunately there'll never be a substitute for your own research. www.moneyweek.com/.../need-unbiased-advice-youll-be-lucky.aspx

Molotov

Rollinghome wrote: »

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.

Another vote from me for this book - the best £10 you'll spend.
If you're looking to invest next years ISA subscription you've plenty of time to do your own research before choosing an IFA or a fund.

MrMajic

Molotov wrote: »

Another vote from me for this book - the best £10 you'll spend.
If you're looking to invest next years ISA subscription you've plenty of time to do your own research before choosing an IFA or a fund.

Thanks all, I've ordered the book!

mr_fishbulb

MrMajic wrote: »

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?

H-L usually have no (or a very discounted) initial charge is for mutual funds/OEICs, but as Rollinghome says this is an Investment Trust so you will pay each time you trade (monthly trading charges can mount up). I think they also charge 0.5% pa for keeping shares/etfs/ITs in a S&S isa.

Rollinghome

On the China Special Situations fund itself there are some interesting questions. It seems too much like a final attempt to wring some value out of Bolton's reputation. It's not clear to me why it would it make sense to go for Bolton as a manager with no real experience of China over say the very experienced and sucessful Martin Lau of the First State Greater China UT (who thinks that China is now expensive and is taking a defensive position).

Both the timing and going the route of an IT seem cynical. What investors would be buying would be Bolton's reputation but he's only committed for two years. Some commentators think China is approaching bubble status. If it was a UT then when Bolton walked away chances are so would the investors and it would be Fidelity who took the hit as the fund contracted. Selling it as an IT seems to be just a device to insulate themselves from the problem so that the investors take the hit when the discount widens.

The prospectus hasn't been issued yet but press reports are that the management fees will be 1.5% plus performance fees. That's huge for an IT and wipes out one of an IT's main advantages. What will make it worth that over something like Witan Pacific with a TER of 0.79% and currently selling at a 16% discount to NAV?

Because 99% of new ITs fall to a discount they normally have to offer new investors a sweetener such as warrants to get a new issue away. Fidelity have chosen marketing over sweeteners. With their marketing skills I don't doubt it will still be a successful launch especially as it's reported they'll be paying 0.5% annual trail commision to advisers who raise initial public offer subscriptions - presumably for selling it within an ISA. With all that effort could even go to a small premium for a while but, though I'm a big fan of ITs, this is one I'll just watch from a distance with interest. Seems to have most of the disadvantages of a unit trust without any of the advantages.

Incidentally, there are some brokers such as TD Waterhouse and www.iii.co.uk who offer ISAs for shares including ITs without an admin charge. When you buy or sell issued IT shares there's the normal broker fees etc. as for all shares. Theres not usually a fee for buying into a new issue though some greedy brokers might if it's done through them.

MrMajic

Rollinghome wrote: »

On the China Special Situations fund itself there are some interesting questions. It seems too much like a final attempt to wring some value out of Bolton's reputation. It's not clear to me why it would it make sense to go for Bolton as a manager with no real experience of China over say the very experienced and sucessful Martin Lau of the First State Greater China UT (who thinks that China is now expensive and is taking a defensive position).

Both the timing and going the route of an IT seem cynical. What investors would be buying would be Bolton's reputation but he's only committed for two years. Some commentators think China is approaching bubble status. If it was a UT then when Bolton walked away chances are so would the investors and it would be Fidelity who took the hit as the fund contracted. Selling it as an IT seems to be just a device to insulate themselves from the problem so that the investors take the hit when the discount widens.

The prospectus hasn't been issued yet but press reports are that the management fees will be 1.5% plus performance fees. That's huge for an IT and wipes out one of an IT's main advantages. What will make it worth that over something like Witan Pacific with a TER of 0.79% and currently selling at a 16% discount to NAV?

Because 99% of new ITs fall to a discount they normally have to offer new investors a sweetener such as warrants to get a new issue away. Fidelity have chosen marketing over sweeteners. With their marketing skills I don't doubt it will still be a successful launch especially as it's reported they'll be paying 0.5% annual trail commision to advisers who raise initial public offer subscriptions - presumably for selling it within an ISA. With all that effort could even go to a small premium for a while but, though I'm a big fan of ITs, this is one I'll just watch from a distance with interest. Seems to have most of the disadvantages of a unit trust without any of the advantages.

Incidentally, there are some brokers such as TD Waterhouse and www.iii.co.uk who offer ISAs for shares including ITs without an admin charge. When you buy or sell issued IT shares there's the normal broker fees etc. as for all shares. Theres not usually a fee for buying into a new issue though some greedy brokers might if it's done through them.

Thanks for that, I definately don't know enough to invest on this. Your comments are appreciated.

coecoepops

Don't just invest in one fund! Spread the risk. I use Hargreaves Lansdown and they are very good. Every month they give you a list of funds they recommend and often the same ones keep coming up as they are still good.

Old_Slaphead

coecoepops wrote: »

Don't just invest in one fund! Spread the risk. I use Hargreaves Lansdown and they are very good. Every month they give you a list of funds they recommend and often the same ones keep coming up as they are still good.

HL recommend a lot of not-so-good performers too.

You don't think they get promotional fees for including some of the funds in their magazine do you (or am I being a tad cynical?)

RayWolfe

It must be more than a dead cert.
Look how they have promoted this launch, first on their home page, pop ups when you add some money on line, at least three mentions in recent mail outs. Makes me despair. All in all, I think they are good, but this sort of blatant marketing from an INDEPENDANT Financial Advisor is not right.

Rollinghome

The most suspicious entries in their "Wealth 150" are those for brand new funds with no track record that too often go on to deliver dismal performance.

Funds like Liontrust European Absolute Return: relentlessly down since it's launch in July 2009 to a current loss of nearly 10% in a period when the total return from the FTSE has been nearer 40%. http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/liontrust-european-absolute-return-accumulation/charts

I think it's an area that needs tightening up. Their advertising blurbs typically include either Dampier or Hargreaves saying "And I'll certainly be including it in my portfolio" but in small letters at the bottom saying along the lines of "This should not be taken as advice." Well sure looks like it to me and I'd guess many take it as exactly that.

Good efficient service but the hard sell I could live without.