Invest in new funds or 'old' funds?

Newbie2saving

StevieJ wrote: »

I hold that one as I like the make up and versatility of the fund, I don't expect it to outperform in an increasing market but provide some protection in a declining one.

Yes this was my thinking as well, it hopefully will keep pace and if the market does fall it will stay above and balance some losses.

Reaper

The theory they push is that small funds (ie new launches) are nimble and able to move around they market, whereas huge funds get stuck with large holdings that are hard to sell without depressing the share price.

While there is some truth in it I still tend to avoid them for the reasons stated in the posts above. I would only ever be tempted if it was run by a fund manager with a good track record in the sector the fund is aimed at. And if it does have such a manager why not simply invest in his existing fund!

Loughton_Monkey

Overheard on a train:

Fund Manager 1: "....... and he threatened my that my half a mil bonus is unlikely to go up next year if I don't get my Liberian Candy Floss fund at least above the African FTSE273."
Fund Manager 2: "Can be a right bar steward at times. Did the same to me last year.
Fund Manager 1: "So what did you do?"
Fund Manager 2: [Look in surprise] "My word. You are a bit green aren't you?"
Fund Manager 1: "What do you mean?"
Fund Manager 2: "Well it's a bit obvious isn't it? Start up a brand new Liberian Funfair Consumables Absolute Alpha Accumulation fund. Shove all the dogs in that - because you'll riun the main fund if you start selling at such a large scale. Replace it by some of the better stuff. Then take some unsuspecting fund supermarket manager out for a 'nice lunch' to get the new one 'pushed' as much as you can. Just before next year, pass the new fund onto some unsuspecting new guy as 'good experience for him......"
Fund Manager 1: "Cheers, Jeremy. Owe you a big one....."

I have nothing if not a fertile, and cynical imagination!

teddy_ruckspin

Loughton_Monkey wrote: »

Overheard on a train:

Fund Manager 1: "....... and he threatened my that my half a mil bonus is unlikely to go up next year if I don't get my Liberian Candy Floss fund at least above the African FTSE273."
Fund Manager 2: "Can be a right bar steward at times. Did the same to me last year.
Fund Manager 1: "So what did you do?"
Fund Manager 2: [Look in surprise] "My word. You are a bit green aren't you?"
Fund Manager 1: "What do you mean?"
Fund Manager 2: "Well it's a bit obvious isn't it? Start up a brand new Liberian Funfair Consumables Absolute Alpha Accumulation fund. Shove all the dogs in that - because you'll riun the main fund if you start selling at such a large scale. Replace it by some of the better stuff. Then take some unsuspecting fund supermarket manager out for a 'nice lunch' to get the new one 'pushed' as much as you can. Just before next year, pass the new fund onto some unsuspecting new guy as 'good experience for him......"
Fund Manager 1: "Cheers, Jeremy. Owe you a big one....."

I have nothing if not a fertile, and cynical imagination!

and so do I! I'll wager this really isnt very far from the truth.

Why pay high TER's for a manager that will only stick around for 24months or so?

dunstonh

If it appeals I will put it on my watchlist especially if it is HL pushing the fund

HL is likely pushing the fund because they are being paid to. You need to think of HL as a product provider, not an IFA. They are being paid to market funds. If Aviva told you about a new fund that was excellent would you believe them? Think of HL in the same way you think Aviva (except without the naff computer system and poor service issues).

I can understand the justification of HL though as he has a good track record.

Does it? HL's marketing is excellent. They make you believe things that are not necessarily the case.

StevieJ

Newbie2saving wrote: »

I went for this as well on manager track record, as I have with another relatively new fund. Fingers crossed our logic will pay off!

They will have have a bad day today, not a good day to be shorting govt bonds.

Totton

I'm with HL and the service is excellent, however I got my fingers burnt following their recommendation for PSigma Income and SVM Global so am now very wary of anything they push. This does not mean I won't buy on their recommendation but there has to be much more before I do so. If you track the HL Wealth 150 for awhile you will probably find several funds that are more deserving of Dog 150, HL are very slow to cancel their rec for any fund although of late there have been one or two where they have done so.

As for new funds, my take on it is that there has to be a very good reason to even bother. I have bought one or two, e.g. Artemis Strategic Assets but mostly I steer clear and go for those funds with long-term managers and good performance.

Mickey

Newbie2saving

Thanks for all the responses, interesting to hear people's experiences and the cautionary tales. This can be a difficult learning curve for a new investor like myself and some points here will be remembered when the next new funds are being launched!