HL Investment Fund Spread 5.77%

honey_pot

Aha well thanks all for your input ! - it seems pretty unanimous that my wounds are self inflicted and i should perhaps audition for a part in dumb and dumber should the opportunity present itself - fair enough ill have to take it on the chin (or in this case in the wallet

However indulge me for a moment and look at this -the HL website Cost tab example for the LEGAL & GENERAL UK PROPERTY TRUST PAIF fund - it makes no allowance for the Buy/Sell spread in any of the projected values which to me is quite misleading.

hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-uk-property-paif-class-i-income/costs

As a novice investor i think things would be more transparent on the HL website if the Buy / Sell Spread cost was displayed in the same way as other costs and they were all totalled up in one place. The distinction between an Initial Cost and a Buy/Sell spread is meaningless for me (and i imagine any other investor) as they have exactly same effect on an investment ie the investment goes down by X amount as the point of purchase - No ?.

Audaxer

honey_pot wrote: »

Aha well thanks all for your input ! - it seems pretty unanimous that my wounds are self inflicted and i should perhaps audition for a part in dumb and dumber should the opportunity present itself - fair enough ill have to take it on the chin (or in this case in the wallet

However indulge me for a moment and look at this -the HL website Cost tab example for the LEGAL & GENERAL UK PROPERTY TRUST PAIF fund - it makes no allowance for the Buy/Sell spread in any of the projected values which to me is quite misleading.

hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-uk-property-paif-class-i-income/costs

As a novice investor i think things would be more transparent on the HL website if the Buy / Sell Spread cost was displayed in the same way as other costs and they were all totalled up in one place. The distinction between an Initial Cost and a Buy/Sell spread is meaningless for me (and i imagine any other investor) as they have exactly same effect on an investment ie the investment goes down by X amount as the point of purchase - No ?.

But the Buy and Sell costs show clearly at the top of each page, including the Costs page you linked to.

sjp999

Isn't the buy sell price displayed towards the top of the page on each of the at a glance...costs tabs?

The story of my life, 8 minutes late for everything

Alexland

Typical case of the investment industry hiding the most important numbers at the top of the page in the large print...

greatkingrat

I actually think they have a point that the projected values are misleading.

Their "illustrative 5 year value" of £5781 is based on the buy price, however it is impossible to ever obtain this value. If you were to sell the investment after 5 years then they would only get approx £5500 depending on the exact spread at the time.

Malthusian

greatkingrat wrote: »

I actually think they have a point that the projected values are misleading.
Their "illustrative 5 year value" of £5781 is based on the buy price, however it is impossible to ever obtain this value. If you were to sell the investment after 5 years then they would only get approx £5500 depending on the exact spread at the time.

True (unless the bid-offer spread changes), but rather overlooks the fact that the projected values are misleading for a far more significant reason: because they are based on an assumption of future growth which is mathematically certain to be wrong.

The projected values are compared with an "Illustrative 5 year value with no charges applied" which is also totally wrong. The value of a £5,000 investment in 5 years if no charges were applied would be £5,000, as no charges applied means it's under the mattress.

honey_pot

Be nice if you bothered to read my post Alexland - so why not include it in the projected values and with the rest of the charges in a single total . - - its not even displayed as a percentage

Audaxer

honey_pot wrote: »

Be nice if you bothered to read my post Alexland - so why not include it in the projected values and with the rest of the charges in a single total . - - its not even displayed as a percentage

I would think the percentage of the buy/sell spread changes all the time, so I don't think it is something that could be shown as a percentage with the rest of the charges.

HL are actually quite good in displaying the Buy and Sell prices so clearly, as some platforms only display the Sell price on the main fund page. See the same fund below on AJ Bell - on the first page it only shows the Sell price of 56.30:
https://www.youinvest.co.uk/market-research/FUND:BK35DT1
I think you only see if there is a different Buy price on that platform when you actually go to buy a fund. I therefore usually check the HL page first when I consider buying a fund, to see if there is a Buy/Sell spread.

Tom99

[FONT=Verdana, sans-serif]If you want to invest in commercial property, to spread your risk, then somewhere along the line the costs of buying property, stamp duty etc, are going to be embedded in your return even if its not so apparent as in this case.[/FONT]
[FONT=Verdana, sans-serif]If you hold the fund long term then some of the spread should be effectively refunded to you as other investors buy/sell and the fund makes a profit from the spread.[/FONT]
[FONT=Verdana, sans-serif]This fund seems to have lost investors over the past couple of years so maybe has had to sell property, but that should still not be as expensive as buying property since no stamp duty is involved. They should therefore still be making a profit from the spread.[/FONT]

honey_pot

Audaxer wrote: »

I would think the percentage of the buy/sell spread changes all the time, so I don't think it is something that could be shown as a percentage with the rest of the charges.

Be interesting to know how often it changes and the mechanics of how that works (ie does the cost price or sell price change or both) - it hasn't changed since i bought the fund approx a month ago. i think they should at least mention it on the projection as clearly it has an affect on the value of your investment. From an investors point of view it seems to work in the same way as an initial charge ?