New Star Heart of Africa

Liz_the_Whizz

I've pitched in £1k via H-L Vantage ISA too.

I know it's risky and I may be waving my money bye bye, but I have always had a real interest in Africa (brother lived out there for a while, brother-in-law still does) so there is some irresistible pull here.

But only £1k of irresistible pull, mind .

If H-L hadn't managed to get the minimum down to that level, I would just be watching interestedly from the sidelines.

PS Debt_Free_Chick - thanks for sharing, it's always interesting to see how people have made the journey

Murphy_The_Cat

Hurray for the three of us - we'll be able to watch the inevitable rollercoaster performance together.

debt free chick, great to hear about how you got from there to here !

tipsychick

Thanks for explaining the fees Debt Free Chick. I thought it was probably something along those lines.

I fancy this too and think it's definitely worth a punt if you're comfortable with the risk, which it seems most of us are!

Is there any way of finding out how close they are to getting the £100m and closing the fund?

Murphy_The_Cat

tipsychick wrote: »

Is there any way of finding out how close they are to getting the £100m and closing the fund?

Not that I'm aware of - but the bumpf does say that the launch offer period is 22nd October to 9th November, which is today :eek:

purch

HL are still taking orders this PM

jamesd

Debt_Free_Chick wrote: »

note that New Star are also using a performance related fee. So they take a decent chunk extra, when (if?) the fund performs very, very well.

They do not need to do very, very well. The fee is 20% of the return above LIBOR + 3%. Six month LIBOR is currently 4.85% so they get and you lose 20% of gains over 7.85% a year. You can get that with no risk at all in some savings accounts. Say it does no better than a good UK equity income fund, 15% a year. 15% - 8% = 7% of which they get 20% or 1.4%. That would get them more than twice what an equity income fund gets for the same performance but you'd be worse off unless they performed better by a couple of percent.

It's an outrageously high charge and puts this fund in the rip-off category for grossly excessive fee charging.

Investing in Africa is interesting but this fund has to be one of the worst possible ways to do it. If you want to get a better deal for African investments you might try:

• iShares South Africa
• SPDR Middle East and Africa
• Old Mutual South Africa investment trust

If they wanted to have any pretense at all of charging a fair performance fee they would base the performance fee on something like a mixture of African market performances instead of LIBOR, so they would actually have to beat markets, not mortgages, to get paid more.

Performance fees might be interesting sometimes. But only if the performance is better than some reasonable benchmark, unlike this one. Say a South African fund getting 20% of any performance more than 3% above the South African index or being in the top 10% of funds for performance after fees.

Murphy_The_Cat

jamesd wrote: »

It's an outrageously high charge and puts this fund in the rip-off category for grossly excessive fee charging.

Investing in Africa is interesting but this fund has to be one of the worst possible ways to do it. If you want to get a better deal for African investments you might try:

Thanks for some informed information from someone who knows what they are talking about.
H-L makes mention several times that the fund is only really suitable for sophisticated & wealthy investors (min investment £12500) and that New Star are looking to raise £100 million ---- surely if it was one of the worst possible ways to invest in Africa, and a rip off for excessive charges they would have targeted 'basic' investors with small investment figures.

Or am I barking up the wrong tree completely.

As I said earlier, I've pitched in with my bit, so from now on in, I'll be able to experience firsthand the level of rip off !



p.s. but it is a nice picture of a lion

Debt_Free_Chick

jamesd wrote: »

Investing in Africa is interesting but this fund has to be one of the worst possible ways to do it. If you want to get a better deal for African investments you might try:

• iShares South Africa
• SPDR Middle East and Africa
• Old Mutual South Africa investment trust

Help us out here, please?

Aren't they slightly different, geographically?

pjala

I've also pitched in with a £1000, but happy so far as it isn't losing money! Most of the other funds are doing just that, so big plus so far.
Any ideas when it begins to trade? The closure of the fund at £100m is only when no more cash is allowed in.
I checked on HL and could not find the info.

cloud_dog

Debt_Free_Chick wrote: »

I really fancy a slice of this, but my ISAs are through Fidelity. Might have to set one up with HL now!

DFC, New Star are available via Fidelity's FundNetwork, and if this fund isnt there yet I'm sure it will be available at some point, why not just transfer your ISA in to FN, it would also allow you alot of flexibility in switching should you want / need to.

Regarding 'high charges' I never used to get too hung up on the charges. I feel (my opinion) it is better to find a good performing fund in the area you are looking at rather than ignoring a fund because of 'high' charges. As this is a new fund without any past performance I would research the fund manager before making a decision.

Regarding risk, I feel that the vast majority of people should have some risk in their portfolio but obviosuly the exposure (percentage of portfolio and risk level) will have a high dependency on their profile.

cloud_dog