Fidelity China Special Situations fund

Dr2B

Oh no...I signed up to this, without fully understanding that the value could fall massively at launch....Does anyone have any suggestions as to what I should do having already been allocated shares for this fund?

Also, I read in one of the posts above that HL will receive a 0.5% commission on the initial amount invested by customers - this is something that I was not told about. I was quite curious as to why they were advertising the launch so heavily, and so I asked if they recieved a fee for getting people to sign up. I was told that they only make money from future transactions....clearly this is incorrect!

Cheers

RayWolfe

Oh dear! Didn't you read the prospectus? Commissions and risk statements would all have been in there. Mind you, it would probably be 50 pages long and very dense. That, however is no reason for you to chose not to understand what you were buying. Even so, you surely bought a high risk fund like this as a long term investment?

turbobob

Dr2B wrote: »

Also, I read in one of the posts above that HL will receive a 0.5% commission on the initial amount invested by customers - this is something that I was not told about. I was quite curious as to why they were advertising the launch so heavily, and so I asked if they recieved a fee for getting people to sign up. I was told that they only make money from future transactions....clearly this is incorrect!

Cheers

I didn't see anyone say that unless I'm missing something? All I can see is:

I think they also charge 0.5% pa for keeping shares/etfs/ITs in a S&S isa.

Also it was mentioned Fidelity would be paying 0.5% trail commission. That is not upfront initial commission - its paid in the future as a percentage of the value of the investment.

The potential is always there for investment trusts to trade at a discount or premium to their net asset value. This is an extra risk factor they have over unit trusts which you should understand before you invest in them. I've never really studied how quickly discounts appear on new issues, but I suspect it happens over time and not immediately after launch.

In late 2008 there were funds trading at extreme discounts (over 50%) although this was in exceptional market conditions.

sabretoothtigger

The word bubble is over used. Unless the underlying market is completely shot then its not a good description

Even if china halved it wouldnt stay that way for long I think

If its overpriced then its not the same as a bad market or bubble. Maybe it is overpriced, Im not sure since I dont invest in China.

I think a pacific tracker is better as it'll benefit if china grows and even if it does not.
The biggest point in favour of a china fund right now is their depressed currency worth and also sterlings unlikely to gain much from here, it makes it ideal for speculation


[Actually you may need to double check which currencys it will deal in]

also the fact that the fund manager does not yet have a licence to invest in the domestic Chinese A-share market. The China fund has applied for one, but it admits there is no guarantee it will receive it.

In the meantime, Mr Bolton will have to gain access to domestic stocks via indirect means, such as buying companies listed on the Hong Kong market with A-share exposure.

Bolton fails to secure backing for China fund
Fund manager unable to muster full support from institutional investors
Institutions lukewarm on Bolton’s China fund

http://www.ft.com/cms/s/0/b7d1377e-4428-11df-b327-00144feab49a.html

StevieJ

Rollinghome wrote: »

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
.

Look on the bright side, at least investors have not paid the rip off performance charge

Performance charges (L) - This fund makes charges that depend on the fund's performance. For full details please refer to the fund prospectus, which is available from Hargreaves Lansdown. Liontrust will earn a performance fee of 20% where the fund outperforms the Hurdle. The Hurdle is 3 month LIBOR return subject to a high water mark.

andyroberts_2

This is showing up in my H-L account now.
Paid £1000
Value shows as £2000.

I can't work out why. Obviously that is not correct.

Anyone else invested and seen it appear now with an odd amount?

(Don't worry - my hopes are not up - obviously something obvious i'm overseeing).

RayWolfe

StevieJ wrote: »

Look on the bright side, at least investors have not paid the rip off performance charge

Brilliant. :rotfl:

Rollinghome

Dr2B wrote: »

Oh no...I signed up to this, without fully understanding that the value could fall massively at launch....Does anyone have any suggestions as to what I should do having already been allocated shares for this fund?

The way it was sold there could be a lot in the same boat as you. Let’s hope they won’t now go buying the 7% corporate bond from doorstep lenders Provident Financial, again unusually paying trail to advisers, that H-L are now flogging, without being totally sure they understand it.

The situation is you’ve bought shares in an investment trust company, which is “closed end” and to get your money back there needs to be someone willing to buy them from you, unlike with a UT. If no one wants to pay the full NAV then shares will trade at a discount. In the longer term it could be a good investment but in the shorter term there doesn’t seem any convincing reason why they won’t go to a discount like most other ITs, especially with the departure of Bolton hanging over it.

Had it been oversubscribed there might have been some disappointed investors wanting to top up. Unfortunately, even with a massive ad campaign they were 27% short of the target and investors wanting to sell won’t have the benefit of the ad campaign . There might even have been a few rash enough to stag it which won’t help either. The other problem for it is that whereas many ITs in specialist areas are bought by institutions, the very high fees probably won’t make this attractive to them so it’s likely to stay a purely retail fund.

But fingers crossed that Bolton does spectacularly well and, as unlikely as it looks, you get a premium. If that did happen it might be a good time to make a hasty exit.

I agree with Ray that advisers shouldn't be allowed to sell investments in this way. Needs to be addressed by the FSA.

sabretoothtigger

Dont worry about it Dr2B its not doomed to failure. Price is not value so even if it fell its not the most important thing so long as you were investing long term

I think that bond is far more risky and bonds mean the complete opposite to most

Had it been oversubscribed there might have been some disappointed investors wanting to top up

It could be argued that a smaller fund is more agile and able to make a quicker profit. Buffet talked about the burden of his success means he can only consider the very largest of investments which are not usually the most profitable

Is this fund allowed to short, invest in currencies and commodities or are his hands tied. I prefer the open kind otherwise why have a good (expensive) manager

Dr2B

andyroberts wrote: »

This is showing up in my H-L account now.
Paid £1000
Value shows as £2000.

I can't work out why. Obviously that is not correct.

Anyone else invested and seen it appear now with an odd amount?

(Don't worry - my hopes are not up - obviously something obvious i'm overseeing).

Yup. Mine is showing up as double the value of the inital amount I paid. I can only presume this is an error.