Virgin Climate Change Fund?

Black20VT

Hi all,

I received something through the post this morning about Virgin's new Climate Change Fund. It actually looks quite good, but I'm a novice on this kind of thing.

Just wondering if anyone else out there has received and if so, what are your thoughts?

Any feedback or comments welcome :T

Thanks,

Chris.

beingjdc

Personally I'm quite positive on those funds, it's all about hunting the next bubble! Pure tech burst a few years ago, housing's bursting now. The central banks will chuck free money everywhere to stop a recession, so it's simply a matter of working out where to be to catch some.

Hard to be sure in these turbulent times though. Personally I've gone for the Schroder fund that's kind of similar. Virgin probably fine too.

purch

This Fund will charge a 'Performance Fee' above it's normal management charge

That in itself is bad enough, but one of the benchmarks it has to beat to 'win' itself this extra 20% is the Bank of England Base Rate :eek:

Therefore if it manages to get a return of more than 5.5% (and maybe even less) then the fund manager 'awards' himself a bonus :T

Sounds like a 'joke' to me

gt94sss2

There are quite a few climate change type funds.

From The Times:

Within the past couple of months F&C introduced its Global Climate Opportunities fund and HSBC unveiled its Climate Change Fund. Virgin Money is starting a fund this month and Allianz’s Global EcoTrends Fund will be up and running next month. Schroders launched a climate change fund in September and Jupiter’s Ecology fund is more than 20 years old.

Its worth shopping around and finding the right one for you - while ignoring the 'Virgin' branding.. sometimes quite poor products seems to hide behind the brand..

Regards
Sunil

Mike-C_2

Black20VT wrote: »

Hi all,

I received something through the post this morning about Virgin's new Climate Change Fund. It actually looks quite good, but I'm a novice on this kind of thing.
quote]

Chris

I too received a promotional puff so I searched around and found this review which I suggest you should read
http://www.everyinvestor.co.uk/investing/funds/the-virgin-climate-change-fund-is-too-hot-to-handl

"All very risky" ... "The Virgin Climate Change fund is not genuinely green" ..."Virgin’s high charges hammer investors’ returns", and so on.

So like me you might want to think again on this one.

Regards

Mike

meester

I wouldn't touch Virgin generally, their finance products seem aimed to con the naive.

meester

What a load of rubbish:

"
Why do you have a performance fee?

Performance fees are there to incentivise fund managers to give you better returns. Often fund managers charge a whole raft of higher fees for their expertise, whether they deliver superior returns or not. With the Virgin Climate Change Fund there’s no initial fee, no bid-offer spread, a single annual management charge to cover our business expenses, and a performance linked fee which only kicks in if we out-perform our stated benchmarks. We think this is fair. We only earn a bonus if we perform.
Wouldn’t it be nice if the taxman, the telephone company and the car mechanic had similar performance related charges too?"

Fraudulent nonsense.
Often fund managers charge a whole raft of higher fees for their expertise

No:

http://www.h-l.co.uk/fund_research/security_details/sedol/0847810.hl

Insight Evergreen

Annual charge1.50%Annual saving0.250%

(other providers will rebate 0.5%)
So that's less than their 1.75% "single annual management charge to cover our business expenses", which clearly covers plenty more than business expenses. And they don't have to pay trail commission (0.5%) either - Insight would get only 1%.

And the statement "We only earn a bonus if we perform." is nonsense, as has been said, because the return is not risk-adjusted - if you invest in bank your money NEVER goes down, whereas this can do. Accepting equity risk but benchmarking against cash is fraudulent.

And on "no initial fee, no bid-offer spread"

You don't pay that with the above fund (or many others like it) either.

Initial charge4.00% Initial saving4.00%

Sell : 47.40p | Buy : 47.40p

They also take their fee every six months, so if the fund subsequently goes down, then they've already run off with your money.

And they can't do basic maths either:

"For example, say the Bank of England rate is 6% and we grow the fund by 11% over the six months. That’s 5% out-performance, of which we get 1% and your fund gets 4%. Add back on the Bank of England rate, leaving your fund with 10% growth overall. That’s roughly how it works."

The rate over six months would not be 6%, but 2.96%. So they would actually get 1.62% of your money.

In a good year, say 25% growth, they have run off with 5% fee, plus 1.75% AMC = 6.75%. Absolute lunacy. This fund is mathematically certain to be a poor performer. They are ripping people off big style. They also fail to mention that in fact their TER is HIGHER than 1.75%, so it doesn't cover their expenses at all.

Incidentally their six month method can inflate their charges as well - if it underperforms base rate over six months (base rate for six months say 2.96%), say 2% growth over six months, then outperforms over the next six months, say 5% growth, then they get a HIGHER performance fee, because over the second six months they outperformed, even if for the whole year they did not.

Gordon Brown should name and shame Branson for exploiting the naive public. Not much chance of that happening though.

dunstonh

Virgin products are generally quite poor value and low quality. They rely on the brand and do well out of it.