H&L Investment Times

Old_Slaphead

StevieJ wrote: »

A classic case is the Psigma fund, never made a penny since launch but still in the 150, their current justification appears to be that they have now become defensive

I bought into that one, unfortunately (and a few others which have not done too well - Melchior Asian Opps, Jupiter Abs, anyone ?)


I now adopt a contrarian approach and treat their recs as ones to possibly avoid

I believe the purpose of this fund is to pay a dividend: it's an equity income fund. A yield of 4.59% paid biannually hardly invites the comment 'never made a penny'. Might trust Dampier's analysis over yours there

The accumulation fund is still down 15% on offer price of 4+ years ago (the income fund down 30%) so the comment 'never made a penny' seems appropriate.

mostwelcome

Old_Slaphead wrote: »

The accumulation fund is still down 15% on offer price of 4+ years ago (the income fund down 30%) so the comment 'never made a penny' seems appropriate.

If you keep your capital in there you are earning a healthy return at 4.59%.

The FTSE All Share is down 22% over the last 4 years. In a period of stock market shrinkage like this, an equity income fund is not where you seek capital growth.

Thing is different funds suit different objectives. If in 2007 you were looking for stocks to grow your capital despite the storm clouds looming, you'd have had to pick carefully, and you may not have received any dividend in the meantime. Maybe you could have been brave and chosen something like First State Greater China Growth. Or Blackrock Gold and General I believe was also one of HLs picks.

Ridiculing an income fund for declining in capital through two stock market crashes while still paying you 4.59% seems to be missing the point.

jimjames

Rollinghome wrote: »

I also liked Dodgy Dampier's comment on the the HSBC American Index: "Once fees are taken into consideration our research suggests passively-managed tracker funds are likely to underperform the index they aim to track over the long term".

It's quite true of course even though the AMC for HSBC tracker is just 0.25% now. Trackers are expected return the index less costs, doesn't need his "research".

I'd not seen this in Investment Times but its an absolute classic. Much the same as needing research to confirm that the sun rises in the morning and sets at night.

I believe Investment Times has been published for over 25 years but it is by HL to promote them and the funds they sell not an independent assessment of anything.

Reaper

I did find the graph on page 2 interesting showing average 5 year returns when UK shares have been at different P/E values, suggesting now is a good time to invest with current P/Es averaging 10.8.

However it should be looked at with great caution. The figures only go back to 1965 and arguably the current turmoil is very different to what happend previously. We could be in a long term bear market in which case the 5 year returns will not reach the levels shown in the graph.

psychic_teabag

I often wonder if history as far back as 1965 is still relevent - with all the electronic trading and globalisation, isn't the investment world a very different place ?

Ilya_Ilyich

marktristan wrote: »

If you keep your capital in there you are earning a healthy return at 4.59%.

The FTSE All Share is down 22% over the last 4 years. In a period of stock market shrinkage like this, an equity income fund is not where you seek capital growth.

Thing is different funds suit different objectives. If in 2007 you were looking for stocks to grow your capital despite the storm clouds looming, you'd have had to pick carefully, and you may not have received any dividend in the meantime. Maybe you could have been brave and chosen something like First State Greater China Growth. Or Blackrock Gold and General I believe was also one of HLs picks.

Ridiculing an income fund for declining in capital through two stock market crashes while still paying you 4.59% seems to be missing the point.

This is one thing I never quite grokked. If the percentage yield remains the same after a capital decrease then surely this means lower dividends are being paid? Or do you mean that the absolute dividend remains the same so the yield based on your original investment stays at 4.59% but new investors would be getting a much better yield?

Totton

For me the point about PSigma Income and the HL Wealth 150 rec, is simply that yes the fund is in the Equity Income arena but that there are far better funds in that sector. I got out of PSigma a long time ago. For another and perhaps better example of the Wealth 150 being slow to react, check out SVM Global Fund and previous HL recs for that one, same with Midas funds before their merger, HL put too many new issues straight into the Wealth 150 and keep dog funds in there for too long also. Overall though I welcome the HL newsletter, it does offer something of interest in most issues but use it only as part of your overall research.

A recent Motley Fool podcast had Dampier on and my ears picked up when he said that of the 2,000 or so funds available he didn't think many managers were very good, just under 150 actually! :-)

Reaper

psychic_teabag wrote: »

I often wonder if history as far back as 1965 is still relevent - with all the electronic trading and globalisation, isn't the investment world a very different place ?

I think electronic trading mostly just makes the markets more volatile in the short term. I agree globalisation is different (or at least more pronounced) and means world markets are tried together more than they were in the past.

mostwelcome

Ilya_Ilyich wrote: »

If the percentage yield remains the same after a capital decrease then surely this means lower dividends are being paid? Or do you mean that the absolute dividend remains the same so the yield based on your original investment stays at 4.59% but new investors would be getting a much better yield?

You're right that the dividend yield is based on the total capital invested. The picture's a bit murky though as dividends are set on a 'per share' basis and vary each year. So the historical dividend is only an indicator. It could yield 4% on £50k one year and 6% on £45k the next. etc.

Rollinghome

marktristan wrote: »

I appreciate the Investment Times, it gives helpful forward looking information in a digestible size for those of us who don't read the FT and Reuters every day.

If you are suggesting that Hargreave Lansdown's unusually dodgy advertising pamphlet is in any way a substitute for the FT or Reuters then that's about the most bizarre assertion I've yet seen on this board (and I've seen a few).

I assume you either work for them or have a very droll sense of humour. Well done.

jimjames wrote: »

I'd not seen this in Investment Times but its an absolute classic. Much the same as needing research to confirm that the sun rises in the morning and sets at night.

I see Dampier tries exactly the same trick using the same words under "HL research - our view on this fund" about the L&G All share tracker so I assume they do the same with all the unprofitable trackers. Seems HL have adapted Mencken's assertion with the idea that no one ever went broke understimating the intelligence of their customers.