HL USA fund launch - thoughts/advice?

christophercharles

Hi everyone

So Hargreaves Lansdown US fund is Launching on the 31st of October. They are offering a sale of only £1 to invest in the fund until its launch. I was wondering if anyone had any thoughts on it?

From the info given it seems to be an actively managed US fund and has charges of 0.83% OCF plus the 0.45% platform fee that HL charges (Total 1.28%). The KiiD says "The Fund aims to grow your investment in excess of the total return of the MSCI USA Index".

As I understand it, funds which try to beat any index are rarely succesful. However, what catches my eye is the £1 sale. If we compare it to say the Vanguard VUSA ETF, which tracks the S&P 500, thats currently trading at approx £62.

What puts me off however is the charges, the lawsuit HL is facing over the Woodford fund and the criticism in the past about its wealth shortlist choice of funds. This makes it difficult to trust them. I'm worried about the consequences of the lawsuit and more importantly, it makes me wonder whether HL actually has the ability to pick and manage funds which returns a good growth over the long term.

My alternative for the US is to top up my Vanguard S&P 500 tracker which is well established and a passive tracker, but i'd hate to miss a good deal. The £1 offer combined with the idea that any investment into the US market, left alone for 10 years will return a positive investment over the long term is very tempting. Even if it is an actively managed fund. Normally when picking a fund i'd look at its past performance over many years and at least some of the companies it will be investing in like Tesla, Alphabet,Berkshire Hathaway etc... but with this being a new fund, it doesnt have that history.

I know there is a lot of gambling and cross-fingers, hope-for-the-best attitude in the markets but I'd gratefully appreciate any red plags/thoughts anyone had.

I'm looking to invest no more than £1000.

Albermarle

It is not a sale, just marketing hype.

If you invest £1000, you get 1000 units in the fund as its starting price per unit is £1.

If for example the starting price was £100 , you would get 10 units.

In both cases you would have £1000 in the fund, so no difference.

christophercharles

Albermarle said:

It is not a sale, just marketing hype.

If you invest £1000, you get 1000 units in the fund as its starting price per unit is £1.

If for example the starting price was £100 , you would get 10 units.

In both cases you would have £1000 in the fund, so no difference.

Thank you for correcting me. So i guess im asking if the price per unit is good value?.

IanManc

christophercharles said:

Albermarle said:

It is not a sale, just marketing hype.

If you invest £1000, you get 1000 units in the fund as its starting price per unit is £1.

If for example the starting price was £100 , you would get 10 units.

In both cases you would have £1000 in the fund, so no difference.

Thank you for correcting me. So i guess im asking if the price per unit is good value?.

The price per unit is meaningless. You get £1 worth of stock if you buy one unit priced at £1. If the units were priced at £100 you'd get £100 worth of stock if you bought one unit. You don't get anything for free or at a discount.

mattywallace121

Avoid, the HL funds are not good & the charges are very high.

ColdIron

The unit price is irrelevant. Buying blind into a new fund with no history without knowing what it's invested in is a coin toss. But that's before considering the cost. Why would you pay 0.83% for such a fund when you could buy an index for a fraction of the cost? It may become a cash cow for HL to their advantage but not yours

dunstonh

So Hargreaves Lansdown US fund is Launching on the 31st of October. They are offering a sale of only £1 to invest in the fund until its launch. I was wondering if anyone had any thoughts on it?

This happens every time HL promote the sale of a new fund in their marketing.

Virtually all funds issue at 100p.  Its not a sale price.  

From the info given it seems to be an actively managed US fund and has charges of 0.83% OCF plus the 0.45% platform fee that HL charges (Total 1.28%). 

Puts it at the upper end of most US equity funds.

As I understand it, funds which try to beat any index are rarely succesful. 

Not strictly true.  Long term, yes but you tend to find managed funds follow a strategy that may work well for some of the cycle but not all of it.

However, what catches my eye is the £1 sale. If we compare it to say the Vanguard VUSA ETF, which tracks the S&P 500, thats currently trading at approx £62.

Do not fall for that marketing.

Thank you for correcting me. So i guess im asking if the price per unit is good value?.

Unit price has nothing to do with it.
Example.

10,000 units at 100p = £10,000
5,000 units at 200p = £10,000

The fund has no history, no data and it expensive.  There is absolutely no reason to go into this fund at this time.

NoviceInvestor1

A lot of people seem to be missing the fact this is a fund of funds. 

You’re taking the hardest market in the world to beat with active management, a hugely unsuccessful strategy to try to do so (fund of funds), a manager with a dreadful track record (look at HLs other fund of funds which are appalling) and then sprinkling one of the most surefire headwinds to outperforming - a massive fee - on top

That doesn’t sound like a recipe for success to me I’m afraid, it baffles me they would attract even a penny from investors here. 

christophercharles

Thank you for your replies. I am very glad i asked because had i not, i would have plunged all £1000 in today. 

LightKnow

Couldn’t they surprise us though by actually turning out to be good ??? With the fees being to one side 😬

I have invested in them but going off my own intuition and research. I am some what positive . ( we see how goes)


I probably don’t have as much experience but I don’t think it wise to dismiss a fund right of the bat and sometimes it worth taking a leap. 

Also. Why would there be any information on what the money going into. Isn’t this technically the part we’re they need to see what investments they have to finalise were and how much of the funds go into x y z company 🤔 

kinger101

LightKnow said:

Couldn’t they surprise us though by actually turning out to be good ??? With the fees being to one side 😬

I have invested in them but going off my own intuition and research. I am some what positive . ( we see how goes)


I probably don’t have as much experience but I don’t think it wise to dismiss a fund right of the bat and sometimes it worth taking a leap. 

Also. Why would there be any information on what the money going into. Isn’t this technically the part we’re they need to see what investments they have to finalise were and how much of the funds go into x y z company 🤔 

Possibly.  If you looking for surprises, buy a lottery ticket. If you're looking for an expensive pseudotracker, buy HL funds.