Hargreaves Lansdowns own recommendations. Your view?

Nine_Lives

Don't worry, i'm not going to ask every time they make a recommendation :rotfl:

I was considering taking a sum from "old money" cash ISA & dumping it into a S&S ISA, after helping my brother with his. It'll have to be old money as i've already subscribed to one this tax year.

Anyway, i got an email through from them today with recommendations - their "new Master Portfolios".

So i select the links that apply to me. Anyone who got the email will be familiar.

* Long term
* Lump sum of less than £10k or reg savings of less than £300pm (there are 2 other options, but i wont be paying in more than £10k).

This then gave me the "answer" of the following:



Initial chargeInitial savingFull saving?Annual chargeAnnual saving 40%Old Mutual UK Select Smaller Cos
Accumulation | UK Smaller Companies4.00%4.00%1.750%0.250% 30%CF JM Finn Global Opportunities
Accumulation | Global5.00%4.75%
1.500%0.100% 30%Lindsell Train Global Equity
Income | Offshore4.50%4.50%1.150%0.000%

Just wondered your view. Whether it's a fair recommendation (maybe not one you 100% agree with, but reasonable all the same), or whether you'd classify it poor or what - and your reasons.

Curiosity

jamesd

I use the Old Mutual fund, don't use the others.

gadgetmind

K_P83 wrote: »

Initial chargeInitial savingFull saving?Annual chargeAnnual saving 40%Old Mutual UK Select Smaller Cos
Accumulation | UK Smaller Companies4.00%4.00%1.750%0.250% 30%CF JM Finn Global Opportunities
Accumulation | Global5.00%4.75%
1.500%0.100% 30%Lindsell Train Global Equity
Income | Offshore4.50%4.50%1.150%0.000%

Um, that's 100% equities. How long term did you say? How would you react if the value dropped by 50% *very*quickly?

No bonds, no property, all in high feee OEIC rather than ITs or trackers ... not for me, but I don't know your status.

Add some bonds (maybe a couple of strategic bond funds?) and I'd be less alarmed, but it's your money.

Nine_Lives

No no, it's not me selecting (i don't know if you read the post, but get the impression you only partially read).

It's what HL recommended. Long term is as long as you can picture - 40yrs in my case.

I still don't know how to properly select one fund from the other, but i looked at the graphs of those & didn't like it (for myself).
I just wondered whether the guys here would agree with HLs recommendations on long term investment or not.

gadgetmind

K_P83 wrote: »

No no, it's not me selecting (i don't know if you read the post, but get the impression you only partially read).

No, thoroughly read and partially recoiled.

That's a very concentrated portfolio, with just three active funds that all seem to be 100% equities. That's why I asked what timescale you'd indicated to HL and what attitude to risk.

I personally dislike the high fees and patchy performance of active funds, but even ignoring that, this portfolio would show a high degree of volatility over short/medium term, and has no uncorrelated assets to rebalance it.

Why this matters could be easily answered via reading the usual book recommended around these parts, which is "Smarted Investing" by Tim Hale.

Even if you read it and then decide to use an IFA and/or active funds, at least you'll have a good grasp of modern portfolio theory.

SeniorSam

In my opinion. any fund recommended should be researched through several outlets to see what others think of their opinion of the fund. If you get a few others thinking that the fund would be good, then perhaps it would.

Difficult to know what your risk profile is and how long you could go without needing the money. People who may have invested 10 years ago who needed the money in the last year or so would probably be disappointed. HL do a good job in general, but some of their fun recommendations may not be as good as others, so do your own research on every fund.

Sam

dunstonh

Is this a real recommendation personalised to you or an off-the-shelf built portfolio that they have for higher risk investors?

Do they rebalance the portfolio?
if they do rebalance, are they using static sector allocations (those from the start) or fluid allocations (those that get updated over the cycle)?
Do they adjust the funds over time to suit the different economic cycle? (managed funds typically suit different periods so need closer monitoring and should be adjusted)

Nine_Lives

It's an off the shelf one dunstonh.

Just to point out that i'm not asking if i should go for it or not. I followed their link just out of interest to see what it'd say & i didn't like what was on offer from their recommendation. I just wondered others views on this "off the shelf" as dunstonh calls it, portfolio.

The link to this is: http://www.hl.co.uk/funds/master-portfolios?utm_source=Silverpop&utm_medium=email&utm_campaign=E4065%20-%20New%20Master%20Portfolios%20-%20revolutionise%20your%20investments%20%281%29&utm_content=Find%20out%20more%20about%20our%20new%20Master%20Portfolios&theSource=E4065&Override=1 & as i'm "long term" that's the path i chose.
Anyway, this was their email:

New: Master Portfolios
Revolutionise your investments Dear Mr
Are you looking for a new way to invest? Perhaps you already hold investments, acquired piecemeal over time, which are no longer performing as you had hoped. Perhaps you have new money to invest and you're looking for an easy way to get started. Our new Master Portfolios could be for you. We think the highest long-term returns can be achieved through a balanced portfolio of funds, offering exposure to every important investment area, with each sector managed by the best managers in their field. Our Master Portfolios have been designed by our experts with this principle in mind. There are five portfolios, each for a different type of investor, with different time horizons and attitudes to risk. They are available for new money, or transfers of existing investments, through our ISA, Junior ISA, SIPP and Fund & Share Account. ► Find out more about our new Master Portfolios The product of years of experience These ready-made portfolios have been carefully selected by our Head of Research, Mark Dampier, with the support of our Research team. They carry out rigorous quantitative analysis combined with thousands of hours of fund manager interviews, to give investors the best chance of achieving their long-term investment objectives. Mark has chosen funds which dovetail well with one another, and suggested additional funds to provide more diversification for those with larger portfolios. You can use them as they are, or as a starting point, adding further investments to reflect your preferences. A dream team to manage your investments We focus on identifying the very best fund managers in each area of the market. Each portfolio therefore represents a dream team; in our view your investments simply couldn't be in better hands. ► View our five Master Portfolios Investing is quick and easy Investing with Hargreaves Lansdown is easy - you can apply online in minutes. You'll then be free to make your own investment decisions, such as choosing the fund ideas in our Master Portfolios. You can invest from £1,000 lump sum per fund or from just £50 per month - choose one of the accounts below to find out more and apply today. Please note these portfolios are not advice. If you are unsure of the suitability of an investment you should contact us for advice. Even the most defensive portfolio can fall in value as well as rise, so you could get back less than you invest. Find out more and invest in a new account ISA » SIPP » Fund & Share Account » Junior ISA » Revitalise existing investments You can transfer existing funds, shares, ISAs and pensions to Hargreaves Lansdown with a simple application form. Once your transfer is complete, you can choose to invest in one of our Master Portfolios. Before you transfer please check if your provider will apply a fee and ensure you will benefit from transferring. If you are transferring a pension please also ensure that you will not lose any valuable benefits or guarantees. ► More information about transferring Yours sincerely

Ben Brettell
Research Editor

dunstonh

It's an off the shelf one dunstonh.

I thought so and it explains the choice. It is not a recommendation in advice sense. It is a direct offer promotion in the same way Aviva send out marketing and you should consider it the same way. Do not consider it as a recommendation.

Are they still rebating some of the trail with these portfolios?

gadgetmind

dunstonh wrote: »

Are they still rebating some of the trail with these portfolios?

For ISAs, yes, but not in a SIPP.

HL SIPPs now need to be treated with extreme caution. Holding equities (inc ITs and REITs) results in a 0.5% pa charge with a cap of £200, holding trackers costs £48 per tracker per annum, and funds don't rebate any trail.

There are *much* better places for a SIPP, and I settled on BestInvest as their £120pa (inc vat) charge covers Vanguard trackers and equities, they rebate some trail on funds, and their dealing fees are zero for trackers and funds, and £7.50 for equities.

atush

Yep, I recoiled. High charges, no balance. Smells of marketing to me.