HL Invest at Launch - £1

lunagirl_2

Looking for some opinions on HL's ready made investment portfolios that will be £1 at launch later in March. I am new to the world of S&S and currently have about £2k in an HL ISA split between 4 funds inc Rathbone Global Opps, Fidelity Index World. I invest £25 a month but i have a few hundred in a lump sum i am due to invest. I don't plan on touching anything for at least 10 years - I am not saving towards a particular goal. My current gain is around 8%.

Better sticking my lump sum in one of my already opened funds or will the ready made fund be an idea? 

dunstonh

Looking for some opinions on HL's ready made investment portfolios that will be £1 at launch later in March.

Virtually all new funds launch at £1.  The unit price is completely irrelevant.
Do not fall for any marketing that hints that the launch price is special or lower.   

jimjames

It's a nonsense offer. There is no benefit in the value being £1, it's purely marketing

El_Torro

I don’t know about the new funds that HL are launching but the ones they currently offer are expensive. Bearing in mind that the platform fee is already expensive this isn’t a great combination.

If you’re willing to pay the HL platform fee (I use HL myself, as well as other platforms) then there tend to be better funds out there than the HL specific ones. For example global trackers and multi asset funds (from Vanguard, HSBC, Fidelity, etc…). 

lunagirl_2

Thanks - wasn't sure if it was a marketing gimmick or not - suppose it is aimed at newbies like myself falling for it!

lunagirl_2

El_Torro said:

I don’t know about the new funds that HL are launching but the ones they currently offer are expensive. Bearing in mind that the platform fee is already expensive this isn’t a great combination.

If you’re willing to pay the HL platform fee (I use HL myself, as well as other platforms) then there tend to be better funds out there than the HL specific ones. For example global trackers and multi asset funds (from Vanguard, HSBC, Fidelity, etc…). 

I have cash in fidelity index world and edentree sustainable management 

Johnjdc

I'm mostly a happy HL customer but I do object somewhat to how strongly they push funds vs other investments. Surely no coincidence that they charge 0.45% forever on funds but not on trusts or shares. That said, for investing small amounts, that charge is still a better option than the dealing fees on shares and trusts.

£1 is certainly a gimmick. It's like buying fruit and veg "by the bowl" at the market. Price stays the same but the amount in the bowl can be more or less.

jimjames

lunagirl_2 said:

Thanks - wasn't sure if it was a marketing gimmick or not - suppose it is aimed at newbies like myself falling for it!

It certainly is a gimmick. It's funny how they stress the track record of funds for their Wealth lists yet promote their own funds like this that have no track record because they're new!

zagfles

Yes, obviously they should launch new funds at £3.24 or 76p rather than £1.

£1 is just so gimmicky.

Johnjdc

zagfles said:

Yes, obviously they should launch new funds at £3.24 or 76p rather than £1.

£1 is just so gimmicky.

£1 is a reasonable price to launch them at, no more or less than any other.

It's the concept of "Invest at launch for a £1 fixed price!" that's a marketing gimmick.

Imagine the fund invests wholly in the shares of Vodafone, currently trading at £1.

You can invest your £1 in the fund, sure enough and that's what it'll be worth on day 1, you'll own 1 share of Vodafone.

If, between now and then, Vodafone goes up to £10, the naive buyer might think "Ooh amazing, I've made 10x profit because I invested at a fixed price".

Whereas of course what will in fact happen is that the fund will buy you only 0.1 shares of Vodafone, for the same £1.

The price cannot be anything other than fixed, it's like the XKCD joke about an advert for "Asbestos-free breakfast cereal".

Albermarle

lunagirl_2 said:

El_Torro said:

I don’t know about the new funds that HL are launching but the ones they currently offer are expensive. Bearing in mind that the platform fee is already expensive this isn’t a great combination.

If you’re willing to pay the HL platform fee (I use HL myself, as well as other platforms) then there tend to be better funds out there than the HL specific ones. For example global trackers and multi asset funds (from Vanguard, HSBC, Fidelity, etc…). 

I have cash in fidelity index world and edentree sustainable management 

As you are looking at minimum 10 years, I would just stick to Fidelity World . The fee is only around 0.13% compared to these new HL funds at 0.98%.
Or if you preferred a bit less volatility you could look at the HSBC Global strategy range. The new range of HL funds look very similar except the HSBC funds only cost around 0.2%.

If you are looking long term you may be better off investing via a pension, due to the tax benefits.