The Peoples Trust

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moneyfoolish
moneyfoolish Posts: 681 Forumite
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edited 24 October 2016 at 1:12PM in Savings & investments
Does anybody have any views on this new fund? It seems a decent concept and seems to be being backed by reputable firms.

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  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    I'm following events with interest. The concept at least is commendable. Noticeable recently how a few IT's are already changing their fee structures. How the Peoples Trust will compete we will have to wait and see.
  • jimjames
    jimjames Posts: 17,671 Forumite
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    edited 24 October 2016 at 12:48PM
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    I saw some info about it at the weekend. Personally I really can't see the attraction over many other investment trusts.

    Charges aren't very low but more importantly all the initial IPO costs are borne by the crowdfunding investors with no guarantee it will go ahead. If it doesn't you will lose the money that the IPO cost and receive any remainder back.

    The idea is nice but it's about 150 years too late...
    Remember the saying: if it looks too good to be true it almost certainly is.
  • moneyfoolish
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    jimjames wrote: »
    I saw some info about it at the weekend. Personally I really can't see the attraction over any other investment trust.


    Charges aren't very low but more importantly all the initial IPO costs are borne by the crowdfunding investors with no guarantee it will go ahead. If it doesn't you will lose the money that the IPO cost and receive any remainder back.


    The idea is nice but it's about 150 years too late...
    I didn't see any details of the charges in the article I read but the advantages I can see are that for a £20 donation you will get a discount (obviously it will be small) on the shares you buy and the fact that the fund managers will receive no bonuses and part of their salary will be paid in shares which I like. Of course, I'm sure there are existing funds which work in a similar way. I also like the aims of only investing in companies which treat their employees well, pay their fair share of taxes and are environmentally-friendly although, again, there are ethical funds with similar aims.
  • jimjames
    jimjames Posts: 17,671 Forumite
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    edited 24 October 2016 at 1:12PM
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    For most investment trusts the fund management group are paid a set fee. So any bonus is from the group not the investment trust. Some trusts have performance fees so if the performance is x% above some level there is an additional fee to the trust but that isn't a bonus to the manager directly.
    Investment trusts are independent companies and have their own boards of directors who are there to look after the shareholder's interests. Many directors are also shareholders so the structure is not really different either.

    It doesn't always work but I've been a fan of investment trusts for over 20 years and still think they are one of the hidden gems of investing. There are big benefits is the closed end structure which does suit long term buy & hold better than unit trusts. Generally the performance is better than unit trusts for the same categories perhaps because they can manage portfolios more effectively when they don't need to sell for redemptions or have to invest new cash.

    Also bear in mind that if the shares go to a discount as many do post launch then any discount initial investors received will be irrelevant as others could just buy on the market for the same price.

    Overall it seems a great bit of PR for investment trusts but I'm not sure it's as unique as is being suggested and may attract people who don't fully understand the risks.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    jimjames wrote: »

    The idea is nice but it's about 150 years too late...

    Never too late to upset the cosy establishment. Discount stores such as Aldi and Lidl are good examples of how to shake up an entire sector by having a simplified business model.
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