Halifax Investment Funds - Thoughts/Opinions

Coeus

Thanks for the reply dunstonh - btw what does your name stand for out of pure curiosity?

I am a little confused with the charges set up between a HL MM fund and picking any other fund. To use a comparison:

OPTION 1 - HL Multi-Manager Special Situations Trust Accumulation Units

(A) Initial charge 5.00%
(B) Initial saving 5.00%
(C) Annual charge 1.00%
(D) Annual saving 0.15%
(E) Total Expense Ratio 2.11%

So there is 0.00% initial charge (A-B) and an net annual charge of 0.85% (C-D). Total expense ratio of 2.11% as stated.

OPTION 2 - Aberdeen Emerging Markets Accumulation Shares

(A) Initial charge 4.25%
(B) Initial saving 4.25%
(C) Annual charge 1.75%
(D) Annual saving 0.25%
(E) Total Expense Ratio 1.88%

So there is 0.00% initial charge (A-B) and an net annual charge of 1.50% (C-D). Total expense ratio of 1.88% as stated.


So though the net annual charge for option 1 is more beneficial than the net annual charge for option 2, though the TER for option 1 is less beneficial than the TER for option 2. Looking into the HL MM report Sep 10 the TER 2.11% is made up of (i) 1.05% TER and (ii) 1.06% expense on the underlying investments.

My conclusion is that, if I were to mirror the holdings in %'s as stated by the Sep 10 report (or most recent breakdown of funds) to mimic the risk and strategy represented by the HL MM fund I could achieve a self-made replica of the fund whilst excluding this 1.05% TER leaving an effective TER of 1.06% on the underlying investments only. Is this correct?

dunstonh

So though the net annual charge for option 1 is more beneficial than the net annual charge for option 2, though the TER for option 1 is less beneficial than the TER for option 2. Looking into the HL MM report Sep 10 the TER 2.11% is made up of (i) 1.05% TER and (ii) 1.06% expense on the underlying investments.

Dont look at the AMC as the true cost. Look at the TER. The TER is as close to the bottom line as you can get. It includes costs of things that dont need to be declared in the AMC.

You would expect option 2 to be cheaper as you are not paying for reinvestment into other funds or rebalancing. Its a single sector fund whereas portfolio funds are a bit of everything and everywhere.

My conclusion is that, if I were to mirror the holdings in %'s as stated by the Sep 10 report (or most recent breakdown of funds) to mimic the risk and strategy represented by the HL MM fund I could achieve a self-made replica of the fund whilst excluding this 1.05% TER leaving an effective TER of 1.06% on the underlying investments only. Is this correct?

Yes. If you did mimic the holdings directly it would be cheaper. However, you would have to rebalance and review yourself. If you have the time and inclination then no problem. Although do remember that they may be trading daily. You wont be. That may work for you at times and against you others.

Coeus

Apart from the initial funding from my Halifax S&S ISA, the real minimum I can invest in a single fund must be 12.5% of £425p/m =~£53 (£50 being the minimum investment in a fund). As such these 7 funds in 7 sectors are preliminary quite interest with a total TER of 1.71% vs the 2.11% for the HL MM.

FUND

---

SECTOR

---

WEIGHT

---

TER

Standard Life Inv UK Smaller Companies(Accumulation)

---

UK Smaller Companies

---

20.00%

---

1.59%
First State Global Resources(Accumulation)

---

Specialist

---

17.50%

---

1.59%
SVM Continental Europe(Accumulation)

---

Europe excluding UK

---

12.50%

---

1.98%
CF JM Finn Global Opportunities(Accumulation)

---

Global

---

12.50%

---

1.63%
Schroder Asian Alpha Plus(Accumulation)

---

Asia Pacific excluding Japan--12.50%

---

1.77%
Gartmore US Growth(Accumulation)

---

North America

---

12.50%

---

1.67%
Insight Monthly Income(Accumulation)

---

UK Eq & Bd Inc

---

12.50%

---

1.77%

So the question I really need to decide is does the risk of investing into these separately (including me lack of time to research other funds) outweigh the extra TER suffered (2.11% - 1.71% = .40% additional TER) from allowing the HL MM to maintain a portfolio on my behalf? Hmmm... tricksie these funds.

Coeus

Hi all!

Just to let you know the investment has gone ahead and I've opened a new post - a diary of such - to pass on my knowledge and experienced gained over the next few years!

https://forums.moneysavingexpert.com/discussion/3069918

THANKS FOR ALL YOU INPUT

Coeus.

StevieJ

Coeus wrote: »

Hi all!

Currently holding a S&S ISA with Halifax with investments in the following funds and proportions:

UK Equity Income Fund - 15.00% (lower risk)
UK Growth Fund - 15.00% (lower risk)
Far Eastern Fund - 25.00% (medium risk)
Fund of Investment Trusts - 25.00% (medium risk)
Smaller Companies Fund - 20.00% (high risk)
To date have generated a 10.2% return over 15m - I think it could generate better returns with other funds.

Does anyone have any thoughts/opinions on how well this is performing and, if possible, suggestions for alternative funds yielding higher returns (must be able to ISA wrap).

Thanks in advance,

Coeus.

It wouldn't take much to replicate your spread with better funds e.g.


UK Equity Income Fund Invesco Perp Income
UK Growth Fund M&G recovery
Far Eastern Fund Aberdeen Asia Pacific
Fund of Investment Trusts ? maybe Artemis Strategic assets instead
Smaller Companies Fund Standard Life Smaller companies

Not advice BTW just some thoughts.