HL Investment Fund Spread 5.77%

The answers above, particularly dunstonh's, are probably comprehensive enough for you. Still,a few cents from me for good measure.

You don't really have a complaint when you click through the buy process saying that you read the key investor information document (which mentions that there is a separate buy price and sell price) and then later want to blame someone else just because some other funds only have a single price and you didn't think to read up on this one.

In a nutshell, you bought a fund that you didn't understand due to being new to doing research, and assuming you didn't really need to read the free info which they asked you to confirm that you'd read before accepting the order. Still:

honey_pot wrote: »

As such on the performance of the fund in the last few years i will be lucky to make my money back within a year.

Investments aren't suitable to be held for only a year. They can go down as well as up. We all know this when we buy investments. It is stated all over the place when you go through the buying process and look at the marketing and the prospectus, KIID, factsheet etc. So, you didn't buy this to just hold it for a year an then dump it. You bought it for the longer term. So whether you break even or make a profit or loss on day one or year one is neither here nor there; the important thing is whether it meets its objectives (and hopefully your objectives) over the longer term.

If you are stressed now, how will you react if it falls in value by 25% or more and they freeze redemptions for a while, denying you the ability to sell it? Perhaps better not ask yourself that question now , but you should have asked yourself those questions, among others, and when reading all the documentation, as part of your research.

1) This fund with this spread is not a realistic investment for anyone and should not be offered for sale by them - the only people who will buy it are people like me who make a mistake.

As it happens, my Mum has this fund within her ISA (also HL, as it happens) while Dad has exposure to it in his ISA through L&G Multi-Asset 5 (a fund-of funds which holds this fund among other ones in other sectors).

They are both pensioners so from your perspective - if you were right - one could say HL are screwing poor old men and little old ladies out of their life savings with these outrageous funds which couldn't be suitable for anyone.

However, they each have a diversified set of investments within their six-figure portfolios and take guidance from me from time to time (as a sophisticated investor who can explain things to them as needed) and I'm not uncomfortable with them using it as part of a portfolio. It wasn't a mistake, although both of them have other commercial property collective investment schemes within their overall set of holdings so it won't be the end of the world if it underperforms.

2) They should do more during the dealing process to make novice investors like me aware of this additional cost. It does not appear as a charge on the CHARGES AND SAVINGS tab on the website although to me it seems no different from paying an initial up front charge.

The purpose of this fund is to buy and hold commercial property, valued at several millions of pounds a time. If they buy a commercial property for ten million quid and with all the stamp duty and legals it costs (say) 10.5 million quid, to acquire that asset, then they might tell you the buy price is £105 for everyone who wants to join the fund this month. They issue 10000 new shares in the PAIF, and buy the property.

However, if you all want to sell and take your money back the next week (meaning they have to sell the property to a rival property investor for the same ten million quid, less the inevitable costs of advertising it and running a sales process with more legal costs etc), then there is only £10 million (maybe less) with which to pay you out, so you can only get £100 per share; perhaps less.

This doesn't mean you've suffered a 'charge' to line the fund manager's pockets, or HL's pockets, merely that the money you get back when selling an investment property can be lower than the sum total of all the costs of acquiring or developing that investment property yesterday. The 'spread' between buy and sell sits in the fund so that the fund can afford such costs of deploying subscriptions and funding redemptions. From the perspective of a holder of the fund, which you now are, it's good that the joiners and leavers will bear these costs through the spread in prices, so that the investors who just sit there and hold, don't need to bear those costs, and the fund will make greater overall gains (or lower losses).

It's like if you bought a house today and sold it tomorrow. You don't say it should be illegal for you to have been sold the house just because you would need the house to go up in value a bit for you to break even. Over the long term, hopefully it goes up.

Anyway just curious to see if people think i have a point or whether its all down to my own incompetence !

thanks

seems to be a consensus for the latter - sorry

If you move your pension to somewhere that gives you more 'control' and freedom to self-invest, finding out how it all works is incumbent on *you* if you are going to use an execution only broker or platform which doesn't give you any related investment advice to go along with your new found freedoms.

honey_pot wrote: »

This fund with this spread is not a realistic investment for anyone

Why not? Over 70% is invested directly in physical property (bricks and mortar). Not tradeable securities. A fund for the long term not short term speculation.