Scottish Friendly My UK Tracker Options (ISA)

bowlhead99

mal48 wrote: »

My only purpose has been to counter claims that My Choice is an extremely poor product, with extortionate charges and low to zero returns. I know not all of these are your arguments. It's a sound enough vehicle for a small invstor, no more than that, Mal

A small investor with only £10-50 a month can get a 'regular saver' bank account paying 4-6% depending on bank, with zero risk of loss. There is no real value in them seeking to use an equities fund that might deliver 7% less 1.5%+ of fees, while exposing them to risk of loss.

A medium investor with £100-500pm can get an investment trust savings plan or a fund supermarket ISA on direct debit with low fees. Or take the 6% regular saving bank accounts. No need to pay 1.5% fees.

A larger investor with hundreds or thousands a month, the world is their oyster, platform fees of a fraction of a percent. No need to pay 1.5% fees.

mal48

An arithmetic lesson for bow. Hope he's sober enough to take it in. I invest £100.The annual charge is 1, 5 %.The return is 5%, so the charge is applied to £105. This gives an amount of £ I.57, which rounded up and applied to the original sum invested gives 1.6%. It's purely a technical formula. Back to basics, I really find it hard to see bow as credible, M

jimjames

mal48 wrote: »

Back to basics, I really find it hard to see bow as credible, M

I think you're alone there and probably showing your trolling credentials or the mask is slipping that you're a stooge for this company.

mal48 wrote: »

To bow.I think you need to get a life. I couldn't be bothered reading all your nonsense. I'm getting brilliant returns and both L and G and SVM have excellent reputations. I beat the market consistently. That's the main point, M

In terms of "getting a life" it's rather ironic that the person suggesting it is the one wasting their time justifying a poor investment. You'd be far better off, for understanding and financially, by actually reading the replies

bowlhead99

mal48 wrote: »

An arithmetic lesson for bow. Hope he's sober enough to take it in. I invest £100.The annual charge is 1, 5 %.The return is 5%, so the charge is applied to £105. This gives an amount of £ I.57, which rounded up and applied to the original sum invested gives 1.6%. It's purely a technical formula. Back to basics, I really find it hard to see bow as credible, M

The charge is not applied to the £105 value of the fund at the end of the year. That would really screw the people who invested towards the end of the year and had not been in it very long.

As mentioned by the key facts / key features document, the charge is accrued and applied on a daily basis. As such, assuming smooth daily straight line growth of the £100 every day at 1.37p per day to give a gross £5.00 return, the average balance of the fund on which the management charge is levied is not 1.5% on £105 to produce 1.575p of charge, but more like 1.5% on an average of £102.50, which is £1.5375 not 1.575.

Taking the management fee bill of £1.5375 off the gross return of £5 would leave £3.4625 of profit, or 3.4625% a year, which rounds up to a 3.5% return. So, the effect of a 1.5% management fee is to reduce a 5% return to a 3.5% one.

This is of course before getting into the maths of daily compounding rather than straight line basis, where the weighted average daily balance on which the fee is charged would be closer to the £100 than the £105 because compound growth means it spends more time at a lower value then accelerates relatively quickly towards the finish line.

Regardless, you sometimes find that fund groups make immaterial mistakes in their illustrative projections. The return is not going to be 5% anyway, and people like you and me should not need a Noddy guide to what the net returns will be for a given guess of the gross return. We just know that high fees are best avoided unless you are getting something good for your money. (We can read the key investor information document which I linked earlier, to see that the ongoing charges forecast for the SF UK Growth Fund exceeds 1.5%).

Setting aside the fees, it does not seem like you are getting something good for your money, because your Active policy which is linked to the SF UK Growth fund, significantly underperformed SVM's own UK Growth fund over the last decade. If you have faith in SVM's approach, their own fund is available at a lower OCF and can be bought on a cheap platform.

mal48 wrote: »

So bow, the self styled financial guru, does his research in a beer garden. Much is explained, M

The comment was merely to illustrate that I am giving up my leisure time to help you and others by correcting your misinformation, and that in this modern internet-connected world one does not have to have an office and umpteen screens to conduct cursory financial research.

You mentioned yourself that no doubt you could 'make slightly more elsewhere' if you could be bothered spending the time to look into it. My recommendation to you and others is to spend the time.

mal48

It's illustrative and based on a supposed yearly growth. The fact the charges are taken daily is immaterial because it's an ideal case. In the figures I used, a 1.5% annual charge applied to both the original amount invested and the growth has the rounded up effect of bringing the growth down by 1.6% from 5% to 3.4% .
Now about these charges. You've read the Key Facts. You seen what the charges are and what they cover.You`ve seen the illustration of the reduction in growth from charges. Are you saying SF are making deliberately false statements? If so put it on the record.

mal48

As for your beer garden, I prefer to do my research with a clear head.

mal48

SVM's own growth fund and the one they manage for SF have been closer recently. The same manager is used for both. However, I'm in agreement with you for once, bow. I have considered using SVM's own fund. I still find SF convenient though and I'm pleased with the system I'm working.

mal48

As for jim and time wasting, jim's made many thousands of posts and none that I've read are in any way instructive. No beer garden for jim!

ffacoffipawb

mal48 wrote: »

As for your beer garden, I prefer to do my research with a clear head.

Doesn't look like it.

bowlhead99

mal48 wrote: »

It's illustrative and based on a supposed yearly growth. The fact the charges are taken daily is immaterial because it's an ideal case.

Because what is an ideal case? It would not be ideal to wait until the £100 had turned into £105 before levying the fee, because that would be far from ideal, producing the greatest possible charge.

Fees are taken daily, as per the key features document.

In the figures I used, a 1.5% annual charge applied to both the original amount invested and the growth has the rounded up effect of bringing the growth down by 1.6% from 5% to 3.4% .

A 1.5% annual charge on the average value of the amount invested over the course of the year, which is the way it's charged, has an effect which rounds down to 1.5% rather than up to 1.6%.

However, an OCF of 1.55% applied to the average balance would have an effect which rounded to 1.6%.

Now about these charges.

Oh, now we are about these charges. Jesus wept.

You've read the Key Facts. You seen what the charges are and what they cover.You`ve seen the illustration of the reduction in growth from charges. Are you saying SF are making deliberately false statements? If so put it on the record.

Well, there are 100 posts in the public domain here documenting our discussions. That is a matter of record.

I pointed out to you the difference between a management charge (which is not the same as the entire ongoing cost forecast), and an ongoing cost forecast.

I pointed out that the key features document did not state that the management fees were the only charges. Specifically, they mention that the 'management charge' for the investment includes the management charge for the product and the management charge for the underlying fund, and that these charges were both taken into account in coming up with the figures used in an example, and that the amounts could change if their costs change.

The example they then quoted shows a performance effect equating to 1.6% of the initial amount invested, and states that the deductions represent charges, fees, and any other deductions.

I pointed out that it is not implausible for these figures to be immaterially inaccurate anyway, as they are only meaningless estimates; you are not really going to get gross performance of exactly 5%.

I mentioned the Key Features document explains that the UK Active policy choice is linked to their Scottish Friendly UK Growth OEIC; you agree with this. The actual current estimate of total fees and charges borne by that Fund (i.e. the management charge and the other unnamed charges) is shown in the key investor information document of the linked OEIC. It states an ongoing cost forecast of 1.55% based on information available for the year to November. I linked to it in post #81. I referred to it in post #87 and #91. I then linked it again in post #95 because it seemed you had not located it yet.

The OCF declared on the KIID, of greater than 1.50%, is consistent with the Short Reports published for the Scottish Friendly UK Growth OEIC, which state OCFs of 1.53 and 1.54 for 2013 and 2014. I complained that the Short Reports on their site had not been updated since 2014 which is a shame, but is probably because Scottish Friendly do not have the intention of providing full transparent information to prospective investors, instead coddling them with vague terms about unspecified risk and unspecified reward and preferring not to disclose historic performance for any of their MyChoice policies. They probably do not get any serious amateur investors actually ask for it, because anyone serious has done their research and balked at the high fees and exited the website.

It seems that the issue is not that you have not been able to locate the KIID for the OEIC to which your policy is linked, but that you refuse to acknowledge it. You preferred to complain about my 'turgid' command of English, than acknowledge when you are being fed useful information.

mal48 wrote: »

As for jim and time wasting, jim's made many thousands of posts and none that I've read are in any way instructive. No beer garden for jim!

By contrast, you have managed to make almost 50 posts over six days, all on one thread - which only has about 100 posts on it in total - because most of the time you were replying to yourself with some inane criticism of someone else that you forgot to include in your earlier post.

Your posts haven't been instructive; you came on here to say that SF was great, were met with a barrage of reasons why they weren't and refused to back down, because you were happy with your portfolio and did not want to show weakness by acknowledging the sensible points made against it.

Your porfolio is:
1) the "Higher risk" policy, investing into a limited mix of L&G passive funds which are available extremely cheaply elsewhere; SF are charging you an arm and a leg for it, yet offer no historic performance or volatility statistics over any time periods to show you how their portfolio mix has succesfully or unsuccesfully changed in response to differing market conditions or what returns a typical investor has achieved in their Active product over the last 3, 5, 10 or more years. But you are happy with it because the return over a limited timescale happened to be enough to pay the fee.

2) the "Active" policy, invested in a high fee UK Growth OEIC whose returns in recent years have offered the volatility of a FTSE250 tracker while only delivering returns somewhere between that of the FTSE all-share and the FTSE 250 indexes over the last decade. It appears to significantly lag the UK Growth OEIC offered by its fund managers SVM under their own brand. This is only possible to know after sourcing data externally, as Scottish Friendly do not choose to publish any up-to-date information. But you are happy with this fund too, because the return over a limited timescale happened to be enough to pay the fee.

So, you are in two expensive funds provided by an ISA manager who does not offer much in the way of information on which to judge them. You still maintain that it is a good product.

However, as you have pointed out in your posts today, you will consider Vanguard as a multi-asset product next year for a fraction of the cost, and you are also in agreement with me that you should consider using SVM's own fund - which is both cheaper than SF's offering and higher performing.

It seems like you are in the unfortunate position of having to reluctantly admit that although you think SF is awesome and you are happy with the returns - and we should all look at SF because they have some really good products - you now agree with us that actually it's definitely worth considering dumping both of your SF funds next year and replacing with open market alternatives which are better products at lower costs.

Meanwhile after your 47 defensive posts on the subject in the space of six days, nobody was convinced that they should move the other way - from open market products to the terrible SF newbie alternatives.

Ah well, I guess you could just start up a new username and go and troll a different thread instead.