HSBC Global Strategy Balanced Costs

Kendall80

As many on here are invested in this fund I thought I'd mention the ongoing cost charge is now 0.55% (in CSD*) This makes it twice as expensive as the Vanguard and Fidelity offerings.

cricidmuslibale

HSBC appear to be becoming ever increasingly unattractive to savers whereas they appear to be considerably more attractive to investors!

Kendall80

Their recently updated KIID still states 0.19% ongoing charge. I've contacted Charles Stanley Direct regarding the discrepancy. Obviously with their own 0.35% charge on top this total this is approaching 'managed fund' levels. For a sanity check - Lifestrategy 60% is still showing its usual 0.27% L&G multi-index 5 still at 0.23%

Alexland

Kendall80 said:

As many on here are invested in this fund I thought I'd mention the ongoing cost charge is now 0.55% (in CSD*) This makes it twice as expensive as the Vanguard and Fidelity offerings.

Are you looking at the older 1995 HSBC Balanced fund for which CSD have the AMC at 0.55%

https://www.charles-stanley-direct.co.uk/ViewFund?Sedol=BG0R529 &Name=HSBC_Balanced_C_Acc&Isin=GB00BG0R5293

Or the newer 2011 HSBC Global Strategy Balanced fund for which CSD have the AMC at 0.10%

https://www.charles-stanley-direct.co.uk/ViewFund?Sedol=B76WP69&Isin=GB00B76WP695

OCF is more comprehensive than AMC so for the GS fund they are reporting the total as 0.55% including their 0.35% platform fee so 0.20% (which may include disclosed internal transaction costs) which is roughly correct. CSD shouldn't really be using AMC anymore.

cricidmuslibale said:

HSBC appear to be becoming ever increasingly unattractive to both savers and investors!

HSBC have a history of reducing fund charges so not unattractive to investors.

Kendall80

Hi. No i'm invested in the Global Strategy balanced fund and have been for some time. I'm not referring to the AMCs. The 0.55% is before CSD's charge as is clearly shown in their charges demo/calc on the same page (total charge including theirs now 0.90%). As stated in my previous post the Lifestrategy and Fidelity offerings are unchanged (ie below CSDs charge).

ColdIron

If you look at the class C units on the All Units tab, you will see the Ongoing Cost (OCF) is 0.19% and that the Transaction Costs are 0.36% = 0.55%. Perhaps this is what the OP refers to

https://www.trustnet.com/factsheets/o/g1hd/hsbc-global-strategy-balanced-portfolio

Alexland

ColdIron said:

If you look at the class C units on the All Units tab, you will see the Ongoing Cost (OCF) is 0.19% and that the Transaction Costs are 0.36% = 0.55%. Perhaps this is what the OP refers to

https://www.trustnet.com/factsheets/o/g1hd/hsbc-global-strategy-balanced-portfolio

Interesting 0.36% is much higher than the 0.04% transaction costs in the below advanced disclosure document from earlier this year.

http://www.assetmanagement.hsbc.com/uk/attachments/other-useful-documents/enhanced_disclosures.pdf

Kendall80

@ColdIron Yes thats correct - making this a total (including CSDs 0.35%) of 0.90% annually (as it is stated as part of CSDs 'total ongoing charge'. Active Fund level charges. 

ColdIron

Yes, I usually disregard Transaction costs. I note they say in their opening paragraph:

• The OCF can be considered as the main cost– this is a direct cost you pay for fund management and all fund managers calculate this number in the same way. The other costs and charges may (or may not) impact your overall returns, so you should be aware that they exist

Kendall80

I was invested in an active fund through CSD that had a 5% initial charge. This was however waived and clearly stated as such. 'May or may not impact returns' is not confidence inspiring language from a financial institution. I'm interested to see how they put it in their reply to my IM.

dunstonh

Kendall80 said:

As many on here are invested in this fund I thought I'd mention the ongoing cost charge is now 0.55% (in CSD*) This makes it twice as expensive as the Vanguard and Fidelity offerings.

I am afraid you are not correct.  It's not your fault but a flaw in the mechanism on how TC ex ante is calculated.
Only the OCF is paid by the individual.   TC is a calculation of charges the fund has suffered internally or could suffer (depending on whether you are looking at ex ante or ex post).  There are also multiple calculation methods where identical holdings, identical transactions and identical costs result in very different figures.     The calculation can, in some cases include an element of profit and loss.   Most would agree that profit/loss should never be shown as a charge.   This is why you see some funds report higher than expected TC for a period and then drop down again or why you see some funds show a negative TC figure.

The TC does not suddenly make HSBC GS Balanced more expensive than VLS.   VLS could suffer the exact same issue in the following period and then drop back again just as will happen with HSBC.

The flaw in the calculation of TC was mentioned to the EU before the brought in the directive but they chose to do nothing about it.  The vast majority of investors totally ignore the TC.  

HSBC appear to be becoming ever increasingly unattractive to both savers and investors!

HSBC have a very good reputation on the investments side and have continuously reduced charges that have forced others to follow.  A number of their funds are very attractive to others.    Although they have some that are not (just like most fund houses).