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    • TomLikesSausages
    • By TomLikesSausages 10th Apr 18, 1:15 PM
    • 70Posts
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    TomLikesSausages
    MFM Bowland Funds
    • #1
    • 10th Apr 18, 1:15 PM
    MFM Bowland Funds 10th Apr 18 at 1:15 PM
    we were considering putting some funds into MFM Bowland fund as part of our Stock and Shares ISA. We notice there is a bid price of 242.75 and an offer price of 262.43, a significant difference of 20.So if we did invest what price would we expect to pay. When it came to selling what would we expect to receive on today's prices.Usually with funds it only shows one price so we are not sure if MFM Bowland is a different concept.Any information on this subject will be appreciated as I am somewhat confused.
Page 1
    • ColdIron
    • By ColdIron 10th Apr 18, 1:30 PM
    • 4,855 Posts
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    ColdIron
    • #2
    • 10th Apr 18, 1:30 PM
    • #2
    • 10th Apr 18, 1:30 PM
    A brief look shows that this is a Unit Trust, these are often dual priced with a spread as you see, unlike the more modern OEICs. They are both 'funds' so no worries there. You should expect to pay 262.43 per unit plus any transaction charges if applicable and receive 242.75 per unit less any transaction charges
    • Prism
    • By Prism 10th Apr 18, 1:54 PM
    • 572 Posts
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    Prism
    • #3
    • 10th Apr 18, 1:54 PM
    • #3
    • 10th Apr 18, 1:54 PM
    Its often referred to as an entry cost. You would pay 262.43 per unit to buy it today. If you sold it tomorrow and it hadn't moved in unit price you would get 242.75. Basically its a 7% charge to buy the fund. Sometimes a fund is referred to as 'soft closed' when it creates a barrier to entry like this. Sometimes its simply because they can get away with it as the fund is popular.
    • Wayne's Woes
    • By Wayne's Woes 10th Apr 18, 1:55 PM
    • 36 Posts
    • 3 Thanks
    Wayne's Woes
    • #4
    • 10th Apr 18, 1:55 PM
    • #4
    • 10th Apr 18, 1:55 PM
    That is a huge difference of approximately 8%. is that percentage is what you would normally pay when you sell unit trust or OEIC holdings. Many funds do not gain that much in 2 years.
    • SurreyRoger
    • By SurreyRoger 10th Apr 18, 2:23 PM
    • 23 Posts
    • 5 Thanks
    SurreyRoger
    • #5
    • 10th Apr 18, 2:23 PM
    • #5
    • 10th Apr 18, 2:23 PM
    Basically you are charged between 7% and 8% to sell your MGM Bowland unit trust. Is this a normal percentage to sell units for all similar unit trusts. Is it the same if you sell direct or through someone like Hargreaves or Elsons.Associates who are both Investment Management companies
    • dunstonh
    • By dunstonh 10th Apr 18, 2:55 PM
    • 96,105 Posts
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    dunstonh
    • #6
    • 10th Apr 18, 2:55 PM
    • #6
    • 10th Apr 18, 2:55 PM
    Most mainstream unit trusts have removed or heavily reduced their bid/offer spread. Nowadays, you only tend to see large spreads if you buy the fund direct from the fund house or it is soft closed.

    MFM Bowland does not appear to have an unbundled share class on the UT. It is possible the spread will be rebated (in part or full) depending on how you are buying it. Being a niche fund you expect quirks.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Linton
    • By Linton 10th Apr 18, 3:41 PM
    • 10,082 Posts
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    Linton
    • #7
    • 10th Apr 18, 3:41 PM
    • #7
    • 10th Apr 18, 3:41 PM
    The fund is pretty small (16M) and obscure. It is currently mostly invested in UK Small Companies although its not in the UK Small Company sector, presumably because the manager has a wide remit. The performance compared with other UK Small Company funds is 2nd quartile, so OK but there are better choices.

    What is its attraction?
    • SurreyRoger
    • By SurreyRoger 11th Apr 18, 5:39 PM
    • 23 Posts
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    SurreyRoger
    • #8
    • 11th Apr 18, 5:39 PM
    • #8
    • 11th Apr 18, 5:39 PM
    MGM Bowland comes out on CityWire website as one of the top,performing investments in the UK section over the past year, so that is why I was looking at it. But now in view of the above comments it does not look such a good idea.I thought it might be part of the Marlborough group of funds.
    • Thrugelmir
    • By Thrugelmir 11th Apr 18, 6:05 PM
    • 61,350 Posts
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    Thrugelmir
    • #9
    • 11th Apr 18, 6:05 PM
    • #9
    • 11th Apr 18, 6:05 PM
    As a small fund sizable unit redemptions could easily pose a liquidity problem. Interesting bag of investments. One to tuck away for the long term if purchased.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • bowlhead99
    • By bowlhead99 11th Apr 18, 9:20 PM
    • 8,313 Posts
    • 15,205 Thanks
    bowlhead99
    MGM Bowland comes out on CityWire website as one of the top,performing investments in the UK section over the past year, so that is why I was looking at it.
    Originally posted by SurreyRoger
    Unless you can avoid paying the spread you really have to review the performance on an 'offer to bid' pricing basis rather than just the standard 'bid to bid' which doesn't capture the cost of buying in at a premium. As Thrugelmir says, one for a long term hold if you want it.

    Smallcap funds find it harder to make good deals if they themselves are massive because they can't deploy all their money into their best ideas, as the money just won't 'fit' into the small space very easily, with liquidity being a problem. So in order to spend the money they're given they would have to dilute their best ideas by spreading the money across lots of smaller companies which might be their relatively less-preferred opportunities. A big spread can discourage casual investors from piling in or out on a whim and growing or shrinking the fund size, making the manager's job harder or at least compensating them for doing it.

    I thought it might be part of the Marlborough group of funds.
    Well it is, and MFM stands for Marborough Fund Managers - who are, in regulatory parlance, the Authorised Investment Manager of all the funds they 'manage' (Authorised Corporate Director of a range of OEICs and Authorised Unit Trust Manager of the AUTs).

    The actual Investment Adviser however, is Hargreave Hale. Like it is for Marlborough's well known Special Situations Fund (which Giles Hargreave has run for about 20 years), European and UK Multi-cap Funds, UK Micro-cap Fund, UK Micro-Cap fund among others.

    Marborough Fund Managers do their Marlborough Emerging Markets Trust themselves, and some of their bond funds which have been run by Geoff Hitchin for three decades - though not the high yield one, which is run by Aberdeen Asset Management's high yield team. The US multicap is done by Boston. The funds-of-funds (Global, Cautious and Balanced) are run by Marlborough Investment Management, a separate team.
    • Ollie Orpin
    • By Ollie Orpin 14th Apr 18, 11:16 AM
    • 18 Posts
    • 2 Thanks
    Ollie Orpin
    Is that the case with all UK Smaller Companies Fund. I put some funds into Old Mutual UK Smaller Companies last year and it has performed quite well .On City Wire's website it shows it is the best performing fund in this sector over 1,3 and 5 years.
    • dunstonh
    • By dunstonh 14th Apr 18, 11:48 AM
    • 96,105 Posts
    • 63,910 Thanks
    dunstonh
    On City Wire's website it shows it is the best performing fund in this sector over 1,3 and 5 years.
    These were top in that respect.

    UT UK Smaller Companies Sector
    1 year: Jupiter - UK Smaller Companies 35.65
    3 years Jupiter - UK Smaller Companies 94.09
    5 years: TM - Cavendish AIM 144.05

    OM was 15.45%, (20 out of 49) over 1 year. 66.77% (9 out of 48) over 3 years and 124.62% (11 out of 47) over 5 years.

    Year to date, it is quartile 4 42/51. Although you would expect that given that it is one of the highest risk funds in the sector (which is already higher risk compared to other UK sectors).


    Is that the case with all UK Smaller Companies Fund.
    What bit are you referring to?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • bostonerimus
    • By bostonerimus 14th Apr 18, 8:06 PM
    • 2,452 Posts
    • 1,761 Thanks
    bostonerimus
    MGM Bowland comes out on CityWire website as one of the top,performing investments in the UK section over the past year, so that is why I was looking at it. But now in view of the above comments it does not look such a good idea.I thought it might be part of the Marlborough group of funds.
    Originally posted by SurreyRoger
    Buying a small niche fund is risky and these funds with large entry costs are best avoided. Also buying a fund just because it has high recent performance can produce a very volatile portfolio. DON"T buy anything yet, instead take a couple of weeks to learn how to construct a portfolio from far more diversified funds and understand something about multi-asset funds.
    Misanthrope in search of similar for mutual loathing
    • chiefnoodle
    • By chiefnoodle 14th Apr 18, 10:20 PM
    • 110 Posts
    • 29 Thanks
    chiefnoodle
    even if it beats all other funds by say 1% a year, you're still looking at 7-8 years before that matches the buy/sell spread premium.

    When you say it comes out the best fund, you seem to be looking only at one specific period. I.e. its quite easy for a fund to look good over a one month period (or in your case one year), when over several years its much less impressive. You have to look at performance in the long run.

    Good luck!
    Last edited by chiefnoodle; 14-04-2018 at 10:23 PM.
    I haven't made a signature as I don't possess a sense of humour.
    • Thrugelmir
    • By Thrugelmir 14th Apr 18, 11:07 PM
    • 61,350 Posts
    • 54,602 Thanks
    Thrugelmir
    even if it beats all other funds by say 1% a year, you're still looking at 7-8 years before that matches the buy/sell spread premium.

    When you say it comes out the best fund, you seem to be looking only at one specific period. I.e. its quite easy for a fund to look good over a one month period (or in your case one year), when over several years its much less impressive. You have to look at performance in the long run.

    Good luck!
    Originally posted by chiefnoodle
    Since launch in 1999. Up 393%. Long term performer. (as at Sept 2017)
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • HarryLong
    • By HarryLong 15th Apr 18, 4:43 PM
    • 29 Posts
    • 1 Thanks
    HarryLong
    I thought Old Mutual UK Smaller Companies was a good investment, it has certainly done me proud over the past 3 years. When you look at how badly the Woodford Equity Fund has performed over the past 12 months you cannot take anything for granted. He had a very good reputation and his investments have been in "Well Known" and established stocks. My fingers have got burnt on this one. I will hold on and hope it may recover.
    • Gee Whiz
    • By Gee Whiz 15th Apr 18, 5:11 PM
    • 13 Posts
    • 1 Thanks
    Gee Whiz
    Yes I fully agree Woodford fund has been abysmal over the past 12 months. I think The Japan sector has at long last after years in the doldrums has shown the best sign of a sustained improvement
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