Hargreaves Lansdown - tomorrow's winners

dunstonh

They say they picked the IMA Balanced Managed sector as it has approximately the same asset mix as the Wealth 150 with 80% equities and 20% bonds. Like you say, finding any comparable benchmark is difficult. Is there a more appropriate one?

It may be 80/20 but the make up of the assets is going to be all over the shop. Especially when the 150 list includes active managed funds which can vary their allocations and such a high quantity of high risk funds (i.e. The 80% may be equities but a balanced managed fund would likely have around 7-10% emerging markets. My guess is that the 150 list would have significantly higher than that. an extreme limited example being 80% JPM Natural resources and 20% Aegon High Yield Bond. It may end up with 80/20 but its nothing near balanced.

What would be a more effective way than using even weighting? Any other method would no doubt be more complicated and would still be open to criticism.

Perhaps not saying anything in the first place would be more sensible. If the data is pointless and used in no real comparable context then it shouldnt be used.

koru

StevieJ wrote: »

To be fair their main message seems to be that you should not be put off investing just because the main index has not shown a profit over the past 10 years, a message that rhymes with many of the posts by Dunstonh over the years.

I have no problem with that message. If they had merely pointed out that indices for other regions and other types of asset and even other UK equity indices have done better than the FTSE 100, I would have no complaint. I just thought it was misleading to suggest that it is easy to spot in advance the star funds, such as JPM Natural Resources.

koru

atypical wrote: »

What would be a more effective way than using even weighting? Any other method would no doubt be more complicated and would still be open to criticism.

One way would be to split the Wealth 150 by sector and then compare the cumulative performance for each sector with the average for all funds in the sector. However, I doubt they are going to release those kind of figures. And, as you say, this would be complicated and still open to criticism.

jimjames

I don't believe the Wealth 150 has been going for 10 years as it was a more recent creation by them.

However I do have a copy of Investment Times from May 2000. The funds mentioned in it are:

Jupiter Undervalued assets
Fidelity Recovery
Sarasin Equisar
Investec European portfolio
HL Geared Growth portfolio (Split capital shares!!!)
Eagle Star with profits bond

I'll let someone else do the performance checking but they are not funds that are in the Wealth 150 at present as far as I recall.

Having said that the magazine does have some useful advice about thinking long term and not investing in the latest hot topic. It also talks about crash of 2000 - but that related to the drop in traditional shares at the time not the tech crash shortly afterwards.

mutley74

I have been investing HL funds since 2004. One thing i found is that sometimes they do promote a new fund based on a managers credentials or a new fund based on a new concept (e.g. Axa talents fund). Its really down to one personal choice which fund best suits their lifestyle and level of risk attitude, same would be when betting in sports etc.
HL do present some good information in the past year, and now after investing many 000's of family money and years of watching various fund etc., best is to go for good track record and proven manager credentials. Although as the cliche goes is "Past Performance is not an indication of future performance"! HL do state on the website that sometimes even the best fund manager can though a tough time with times of poor performance (e.g. Newton income, AXA Income fund etc). However, in the longer term a good manager should do better than other funds IMHO.
However, regulary reading of HL website fund news keep me posted with new funds, funds that are now recommended and those which have lost the shine and dropped from the 150 list, keeps me busy ensuring my investments are in sound places.

Mikeyorks

I have been increasingly concerned that my HL portfolios are adorned more and more with the little yellow stars that indicate they're in the Wealth 150. With the exception of a couple ....... they were not there when I bought the funds.

Perhaps I should offer them my fund selecting pin?

jimjames

Mikeyorks wrote: »

I have been increasingly concerned that my HL portfolios are adorned more and more with the little yellow stars that indicate they're in the Wealth 150. With the exception of a couple ....... they were not there when I bought the funds.

Perhaps I should offer them my fund selecting pin?

Its hard to know if thats a good thing or not isn't it! Yellow star could be the sell signal not the buy signal! Fortunately my trackers don't get in the 150 list....

mutley74

Mikeyorks wrote: »

I have been increasingly concerned that my HL portfolios are adorned more and more with the little yellow stars that indicate they're in the Wealth 150. With the exception of a couple ....... they were not there when I bought the funds.

Perhaps I should offer them my fund selecting pin?

Theres also a few funds which other brokers recommend taht are not in HL's list. Just read thisismoney for ideas. But even HL are suggesting one should watch out for some new funds that maybe added to the 150 list of they show good performance. This includes the Junior gold, and Finn Africa fund.

thenudeone

Rollinghome wrote: »

They then tell half of those 5000 that the price will rise and half the opposite.... They then hit them for a large fee for their next 'infallible' tip. Lots of variations on a very old ploy including as used many moons ago by good old Horace Batchelor, inventor of the "Famous Infra-Draw Method".

The 80s TV series Minder showed a variation of this:
1) Advertise a telephone tipster service on a no-win no-fee basis.
2) Give each punter a random (but different) horse to back, ensuring that every horse name is given to at least one punter
3) The losers pay nothing
4) The winners pay the tipster fee, happy that they have received "a good tip"
Result - risk free profit!

thrupence

Bestinvest do a rather interesting fund manager rating where they assess whether a manger was just lucky in his choices or did he actually actively add value. Dunno how they work this out, but you can access it here: http://www.bestinvest.co.uk/investment-research/manager-research/top-managers.aspx But the other interesting thing is that even their top rated managers don't beat the benchmark index by anything like the charges they make for their funds. Typically a top manager might add a value of 0.8% per annum for example, but be charging 1.75% for his services and that's without all the other trading charges that are involved in fund management. I suppose you just have to look at fund charges as as an expense incurred, which is reasonable enough.