Hargreaves Lansdown (NEW Fund Launch) "HL US Fund"

TheMissingNTLDR

Hello!
My company is using HL for Private Pensions hence I have a choice invest in whichever Fund is listed there but obviously according to my own research or financial advice.

However, so far I had stuck to the low cost default fund i.e. HL Growth Fund Accumulation (GBP) which started in May 2022 when my company switched over from Aviva to HL.

Also, I did move a significant accrued pot (approx 60k gbp) from Aviva to HL which is just lying as cash on HL. At moment just delebrating on where to invest this cash; plus looking at current market, hopefully waiting for a dip!!

In last few days I saw that HL is about to launch a new fund called "HL US Fund" starting at 100 pence per Unit.

Well, I am tempted and may take a plunge but dilemma is whether it will be just a gamble without knowing any details on the fund. I mean their website does not link (at least yet) any details on where the monies will be invested i.e. companies etc. The link is here: https://www.hl.co.uk/funds/hl-funds/hl-us-fund/factsheet/fund-analysis

There are also couple of recent Ads on Youtube i.e. if you search for HL US Fund on YT, it talks generally about how potentially big the investment can grow, but that's about it.

Just seeking some guidance from experts whether it is a good idea to invest in US or atleast on any NEW funds when they come out. From your experience do they normally go up due to the hype or plunge after few days of FOMO? Is it best to wait and see when the price settles down?

Not seeking any financial advise by any means

TIA

dunstonh

In last few days I saw that HL is about to launch a new fund called "HL US Fund" starting at 100 pence per Unit.

100p is the typical launch price for unts.   So, not something that should really be emphasised as a postive.

Well, I am tempted and may take a plunge but dilemma is whether it will be just a gamble without knowing any details on the fund. 

What would make this fund appealing to you?   HL don't have a good track record when it comes to research (they continued with Woodford despite the level of illiquid assets being known 2 years before it failed and when other research companies had recommended pulling out).  There is no data on the fund.    You would be entering it blind.

Just seeking some guidance from experts whether it is a good idea to invest in US or atleast on any NEW funds when they come out.

It is good to invest in the US for the US allocation of your portfolio.  Its not good to invest in the US for say the European allocation of your portfolio.

Its usually worth avoiding new funds.

 Is it best to wait and see when the price settles down?

Are you of the belief that 100p is significant?   I have seen that before with people referring to HL marketing.

NoviceInvestor1

Investing in this fund would be absolutely mental 

Aminatidi

The fees on that fund look very high once you take HLs platform fee into account.

I'd be looking at fees among other things as they make a massive impact on your potential returns.

JohnWinder

‘The Fund aims to grow your investment in excess of the total return of the MSCI USA Index (net of 15% Withholding Tax) over rolling 5 year periods. The Fund's return aim is measured after the deduction of Fund charges.’ So says HL.

Nice objective, but we can say with confidence that it probably won’t achieve that, as we’ve read the SPIVA reports year after year. It just isn’t easy to beat a broad market index over a long period. And what does ‘rolling 5 year periods’ mean? We need an investment to perform well over the period we hold it, not over arbitrary (choose to flatter) 5 year periods. 

Probably worth reading a decent book on investing.

And if you’re waiting for a dip, read this first, as it can be difficult to make it a winning strategy: https://www.bogleheads.org/forum/viewtopic.php?p=6922649&sid=3b7f87d7a57efe826be0871892874a93#p6922649

ColdIron

0.83% on a fund with no track record that you are entering blind seems unwise. Why would you choose it over (plucks random fund out of the air) the Vanguard US Equity Index? 4,000 companies for 0.10%

How will you replace the US component of the HL growth fund or will you just be doubling up on your already expensive US exposure?

For you I think this is an easy to dismiss 'offer'

Albermarle

Also, I did move a significant accrued pot (approx 60k gbp) from Aviva to HL which is just lying as cash on HL. At moment just delebrating on where to invest this cash; plus looking at current market, hopefully waiting for a dip!!

Of course you need to decide what do with this £60K. A number of factors can be taken into account, but the fact that HL happen to be launching a new fund, is not one of them. 

If you are looking to 'buy the dip' how will you know that the dip is not the start of a big slide, or in fact we might be at or near the bottom of the market already, and by not investing now you will miss the upswing?

ivormonee

HL's track record overall isn't all that great. I'm not sure there is anything to suggest this fund would be any different.

TheMissingNTLDR

I would like to thank you all individually for your very helpful replies and appreciate taking time to help a newbie like me

This definitely helped me making a decision and I think I will give it a miss on putting money on this. Thank you!!!

dunstonh

As for investing in the US, in general, you never know what is coming next but, for UK based investors, its likely the next cycle will see US equity underperform Global equity.

That is not uncommon as you do tend to find that global vs US alternate with each cycle.  That doesn't mean it will but one of the major influences is exchange rate.   In this cycle, US equity has outperformed every other area.   This is despite US equities crashing.   However, UK investors have seen the US dollar rise and Sterling fall which improves returns from the US.   Against other currencies, Sterling is down but by nowhere near as much.  The main driver has been a strong dollar.  Looking ahead, at some point you would expect the US dollar to fall and that will create a drag on returns on unhedged funds.  If you couple if with a rise in Sterling, you could find the recovery in US equities gets wiped out for UK investors.     So, using a hedged US equity fund for some of your US equity allocation may be a good idea.     The hedged fund removes the influence of currency movements.

ivormonee

Deleted_User said:

TheMissingNTLDR said:

the low cost default fund i.e. HL Growth Fund Accumulation (GBP) which started in May 2022

That looks like a good option. Only 0.1% OCF

Is it realy 0.1% OCF? From HL? Seems unlikely. Does it include the OCFs of the underlying funds? I've had a look at the HL website and fund details but can't determine whether it does, or doesn't, include the costs of the underlying funds. I would presume it does though, in which case it's an unusually low OCF for an actively managed fund, and one from HL no less. Extraordinary.