H-L introduces a Tracker Platform Charge

Rollinghome

gadgetmind wrote: »

The only arguments I've ever seen regards ITs being more risky is that they are allowed to use modest gearing and that discount/premium issues mean that the value can drift away from the NAV.

The example that tends to be given is the 'magic circle' scandal involving some splits in the fall-out of the 2001 crash where Aberdeen Asset Management were the major culprits. The scandal of the "Cautious Managed" unit trusts of Cru Arch funds and others could be considered for balance.

koru

gadgetmind wrote: »

A splendid link which explains all the principles in a compact and readable form. Thanks.

That guy puts out some of the best educational material on investing that I have ever seen. More of his stuff here: http://www.fundadvice.com/

gadgetmind

Rollinghome wrote: »

The example that tends to be given is the 'magic circle' scandal involving some splits in the fall-out of the 2001 crash where Aberdeen Asset Management were the major culprits.

I was otherwise engaged during the 2001 crash, and for the most part sat it out, but I'm told it was all terribly exciting.

The scandal of the "Cautious Managed" unit trusts of Cru Arch funds and others could be considered for balance.

Well, quite. And IFAs who sold those funds can't possibly be held to blame, after all, it said "cautious" in the glossy sales pack, the fees looked very tasty, and both Dubai property and Greek shipping offer diversity.

jimjames

Rollinghome wrote: »

It includes several that seem to already pay them a decent fee. Seems the only way to find if you've been hit is to check the key facts for every fund you own as they don't seem to have published a full list anywhere.

Not sure about others but HL have written to me with a full list of funds in my ISA and SIPP that are affected by the charges. Still doesn't help how much they are but at least I can plan a move if needed.

Cavendish sounds of interest, is there any info on comparisons between platforms?

gadgetmind

jimjames wrote: »

Cavendish sounds of interest, is there any info on comparisons between platforms?

For my wife and daughter's pensions, I just found a platform with a good range of funds at a good AMC. Aviva came out best then, but it might have changed now.

Were I doing it now, I'd seriously consider HL SIPPs holding Vanguard LifeStrategy funds.

competitionscafe

jimjames wrote: »

Cavendish sounds of interest, is there any info on comparisons between platforms?

http://www.candidmoney.com/actionplans/actionplan3.aspx

https://forums.moneysavingexpert.com/discussion/3153942

webnibbler

gadgetmind wrote: »

Were I doing it now, I'd seriously consider HL SIPPs holding Vanguard LifeStrategy funds.

The Vanguard LifeStrategy funds do look a good option, but I was wondering how you might lifestyle these funds over the long term? I read the post over at Monevator (http://monevator.com/2011/10/25/lifestyle-vanguard-lifestrategy-funds) but wasn’t sure I could make that strategy work.

Might one solution be to use the LifeStrategy 100% Equity fund and balance this with the Vanguard UK Inflation Linked Gilt Index fund. Over the next 20 years the allocation could be shifted from the LifeStrategy 100% Equity fund into the Gilt Index fund. This seems like a simple solution – or am I missing something?

gadgetmind

webnibbler wrote: »

Might one solution be to use the LifeStrategy 100% Equity fund and balance this with the Vanguard UK Inflation Linked Gilt Index fund. Over the next 20 years the allocation could be shifted from the LifeStrategy 100% Equity fund into the Gilt Index fund. This seems like a simple solution – or am I missing something?

If you look at the LifeStrategy 80% equity fund it holds 10% UK Government, 4% UK Inflation Linked Gilt, and 6% UK Investment Grade Bond. Just holding the Linked Gilts alongside won't be as diversified.

TBH, if you can balance between gilts and the 100% equity, I'm not sure why balancing 100% equity against (say) 60% equity is hard.

BTW, the Vanguard funds with >=80% equities actually hold a slightly different global mix of equities.

psychic_teabag

I think I read somewhere (probably monevator) that it's slightly cheaper (TER) to hold the individual vanguard funds than to use the lifestrategy container - the TER of the composite is higher than the averaged TER's of the separate funds. You'd have to do your own balancing, then then you basically want to do that to some degree yourself anyway (though on a longer timescale).

But obviously on HL the extra platform fee per fund would change that. In an ISA, BestInvest's annual fee of £50 lets you hold as many vanguard funds as you want. (In a SIPP it would be £100.)

psychic_teabag

The lifestrategy funds themselves are quite new, and so don't have much history, but they are well-defined composites of indices with longer histories, so presumably it ought to be possible to extrapolate backwards to invent some approximate history. Has anyone had a go at this ? I assume the (constant ?) rebalancing means it's much more complicated than just winding each index backwards over time and then mixing the results in the required ratios at each point in time.

Or are there any similar funds out there that would allow qualitative if not quantitative comparison ? (Presumably books/articles on asset allocation would give the historical performance of various combinations of asset classes.)