Anyone tempted to move your cash ISA to Blackrock Absolute Alpha ?

wombat42_2

Blackrock Absolute Alpha includes shorting so it can make money even if the stock market falls. It has done pretty well so far, see:
http://www.h-l.co.uk/fund_research/security_details/sedol/B11V7T6.hl

Aegis

Not really. My cash reserves are supposed to be pretty much instant access with no penalty, so I'd really rather not tie them into even a fairly involatile asset-backed investment.

cepheus

By shorting you mean the fund makes use of such instruments. I've moved some of my main S&S ISA money into this. It isn't a bank account though and there is no guarantee that you will get more back than you put in, look at the first few months after launch. Incidentally it is capital gain so there is no need to use ISA money and as far as I know the money (if you still have it) could be retrieved very quickly. In short it is useful as part of a balanced portfolio.

jamesd

A large chunk of my property deposit money outside ISA and SIPP is in this fund. So is a fair bit of my pension money while it's being gradually invested in more volatile investments over the year. A fair bit of my UK money in my ISA pot is also in it, though the UK portion of that is low.

I'm also using it as a large part of my mother's S&S ISA, since it offers the relative stability that's good for her needs, while probably doing significantly better than cash.

Cash ISA money is all being moved to S&S ISA long term and over the summer I'll probably keep a lot of it in this fund as a portion to benefit if/when the markets in general fall again.

I don't plan to have any money left in a cash ISA for the next few years. For immediate access I'm using arranged overdraft facilities and for access within a few weeks I'm using fairly stable funds that produce capital growth outside any tax wrapper.

rail.link

wombat42 wrote: »

Blackrock Absolute Alpha includes shorting so it can make money even if the stock market falls. It has done pretty well so far, see:
http://www.h-l.co.uk/fund_research/security_details/sedol/B11V7T6.hl

The HL document has no info on the holdings.
Any idea about the main holdings ?

RubyBish

You will have to click the comply notice first after this link

http://www.blackrock.co.uk/uksite/fund-centre/fundfactsheet.asp?fundcode=1000848&section=breakdown

Dolphin Capital Investors Ltd. 2.2%
Charter 1.6
Easyjet 1.5
Meggitt 1.5
William Hill Plc 1.5
Amlin 1.3
BAE Systems 1.3
Compass Group 1.3
Kentz Corp Ltd 1.3
Firstgroup 1.2

It doesn't specify the short positions though and how large they are.

rail.link

Thanks, Ruby !

Much appreciated.

stevedb11

Please be aware regarding this fund, that you may have to wait a while to withdraw the same amount as you invested, because of the difference in the Buy and Sell prices.
E.G. Current prices :Sell : 118.60p | Buy : 124.70p |
Hope this info helps;)

Jonbvn

6.75% up YTD seems excellent, given the volatility in the markets recently. Of course when the market is rising big guns this fund will not seem so good by comparison.

Ian_W

Interesting Fund but I do wonder from wombat's title if some of us aren't being lulled into a false sense of security [safe as houses, nar - safe as a cash ISA!] by what Aegis terms it's "fairly involatile" nature thus far.

My fairly inexpert observation is that Funds, AFAIK, are risk rated on their volatility. The more volatile they are, the more risky they're deemed. This Fund has ultra low volatility but is that = to SAFE?

Personally I don't think so and like cepheus I hold it as part of a balanced portfolio with a little under 10% in it. I'd love someone to explain how you can rate the risk of this fund compared to others because if it is "safe" - or at least safer than other equity based funds - then I'd certainly use it for more of my dosh.

Though not the cash ISA's.

cepheus

stevedb11 wrote: »

Please be aware regarding this fund, that you may have to wait a while to withdraw the same amount as you invested, because of the difference in the Buy and Sell prices.
E.G. Current prices :Sell : 118.60p | Buy : 124.70p |
Hope this info helps;)

A few comments, first with reference to the above. Unit trusts are not priced like shares or ITs. The bid/offer is a red herring. What is more important is the broker discount, and difference between the bid and creation price. This is the case of Blackrock alpha and Hargreaves Lansdown is very tight. Moreover you don't pay stamp duty. I quote from my broker

The lowest price that a new unit can be purchased at is a separate creation price between the bid and offer prices. The creation price is the bid price plus any addition charges for creating the new units. With the full saving on the fund offered by Hargreaves Lansdown there would be no initial charge hence you would purchase units at exactly the creation price.

If you purchased a new unit in a Unit Trust with a full initial charge discount and then sold it the following day (assuming no price movement) the loss would be the spread between the creation and the bid price.

To give an idea of these figures the creation and bid prices for Blackrock absolute alpha on 19 March are as follows;

Creation price, 115.9 pence
Bid price, 115.7 pence.

With regard to risk, I doubt if there has been enough market variability to test the risk of this fund, it seems highly dependent on the ability of the manager to predict which shares are going up or down. The only thing I have confidence in with this fund, is that it is unlikely to go up or down in tandem with other shares and can therefore reduce risk in a balanced portfolio.