HL Invest at Launch - £1

zagfles

Johnjdc said:

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".

Frankly, anyone who doesn't understand that should perhaps avoid investments altogether!

NoviceInvestor1

HL's self run funds are on the whole absolute dogs.....avoid 

talexuser

I agree, one of their multi manager funds is in the latest Best Invest Dog Funds list, and that requires some level of dire underperformance at high fees to get there. The "wealth" list is full of funds with better performers in their respective sectors, ones that don't give HL a special discount for recommendation.

EdSwippet

zagfles said:
Frankly, anyone who doesn't understand that should perhaps avoid investments altogether!

Probably true, but that doesn't give HL licence to coat this with its own brand of misleading marketing slime. The FAQ is "Why invest in a portfolio fund at launch?", and the correct answer is "No reason whatsoever."

But that's not HL's line. Instead we see three paragraphs implying that £1/unit is somehow a bargain, including "After the launch, the value of each unit in the fund will move up and down based on the value of the underlying investments."

Right. And before the launch, the amount of assets that will go into each £1 fund unit moves up and down based on the value of the underlying investments.

(Because I had ten minutes to spare, and because it's trivial to do, I've reported this to the FCA as misleading.)

zagfles

EdSwippet said:

zagfles said:
Frankly, anyone who doesn't understand that should perhaps avoid investments altogether!

Probably true, but that doesn't give HL licence to coat this with its own brand of misleading marketing slime. The FAQ is "Why invest in a portfolio fund at launch?", and the correct answer is "No reason whatsoever."

But that's not HL's line. Instead we see three paragraphs implying that £1/unit is somehow a bargain, including "After the launch, the value of each unit in the fund will move up and down based on the value of the underlying investments."

Right. And before the launch, the amount of assets that will go into each £1 fund unit moves up and down based on the value of the underlying investments.

(Because I had ten minutes to spare, and because it's trivial to do, I've reported this to the FCA as misleading.)

You do seem to be reading stuff that isn't there. I remember someone saying a similar launch was implying it's a privatisation

They say "Then shortly after the launch offer closes, we’ll start investing your money in the market." So it's blatently obvious that "before the launch, the amount of assets that will go into each £1 fund unit moves up and down based on the value of the underlying investments" because the assets are being bought after the launch!

As I said, people who don't understand this should probably get a POA for someone else to manage their money...

EdSwippet

zagfles said:

As I said, people who don't understand this should probably get a POA for someone else to manage their money...

Not everybody is as clever as you are. HL are clearly trying to create the impression that £1/unit is somehow special. It is not.

zagfles

EdSwippet said:

zagfles said:

As I said, people who don't understand this should probably get a POA for someone else to manage their money...

Not everybody is as clever as you are. HL are clearly trying to create the impression that £1/unit is somehow special. It is not.

Are they really? You obviously don't think it is. Did anyone here think £1 was a special bargain price? Or just a convenient launch price?

EdSwippet

zagfles said:
Are they really? You obviously don't think it is. Did anyone here think £1 was a special bargain price? Or just a convenient launch price?

Exactly. It's a convenient price, and nothing more. But then, why does HL feels the need to blather on about £1 in a "Why invest in a portfolio fund at launch?" section?

I can only think of one reason for this. In marketing terms, it is a "feature" misleadingly painted as a "benefit". Perhaps you can offer an alternative explanation for why this section of the FAQ exists as it does, because I cannot.

masonic

zagfles said:

EdSwippet said:

zagfles said:

As I said, people who don't understand this should probably get a POA for someone else to manage their money...

Not everybody is as clever as you are. HL are clearly trying to create the impression that £1/unit is somehow special. It is not.

Are they really? You obviously don't think it is. Did anyone here think £1 was a special bargain price? Or just a convenient launch price?

They've toned it down a bit from offers I can remember being marketed in the past when I was a client. Those old offers really did imply that the launch price was a special deal, and that clients would need to hurry to secure the launch price. This seems to have been pulled back to the line of what is acceptable without crossing it.

While it is good many have clarified to anyone under misapprehensions that there is no advantage in acting by 11:59, 7 March to invest at launch, and the launch price is not a special price, even more importantly these are expensive funds that will attract an expensive platform fee to hold, so not a great choice to hold at all, let alone at launch.

At present, it also appears there are no details of the intended asset allocation of the funds beyond a very general description of intent. Perhaps further details will be forthcoming, but anyone who feels willing to write HL a cheque at this stage probably ought not to be making their own investment decisions for their own safety.

Audaxer

Out of interest I just had a quick look at these funds on HL and I can't even see details of what equities or bonds they hold, or even what percentages are of the different asset classes. I'm not going to invest in them, but if I was considering it I'd want a bit more information about them.