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Hargreaves are launching a new UK growth fund next week. Is there any particular reason to get in at the start?

I figure it's not like an IPO? The fund value is based on performance, right, not market perception?

  • Is it a closed-end or opened-end fund? – littleadv Jan 17 '15 at 5:10
  • It looks like it is open ended hl.co.uk/funds/multi-manager-funds/… – Codek Jan 17 '15 at 11:42
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    I wouldn't be in any rush to give away 2% of my assets each year (or about a quarter to a third of expected annual returns) to a fund manager, let alone multiple fund managers. Have you looked at index funds (trackers)? The fees are often substantially lower. – Chris W. Rea Jan 17 '15 at 16:28
  • @ChrisW.Rea do you know how much of the FTS100 is Oil and Commodity and Banks all of which aren't exactly shooting the lights out at the moment - problem with indexes you have to buy the dogs along with the good ones – Pepone Jan 17 '15 at 19:00
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    @Pepone I live in Canada, and I could make your same remark about the FTSE 100 about our TSX 60 index (worse: 36% financials, 22% energy) ... but I don't invest in just that one index. Consider: (1) There are broader indices. A diversified, low-fee portfolio can & should contain more than one tracker. (2) People, including fund managers, aren't great stock pickers. On average, their performance (ignoring fees) is average. When you subtract fees, it's bad. Higher fees? Even worse. (3) The out-of-favor, poor-performing stocks of today may be tomorrow's darlings. Who can know? See #2. – Chris W. Rea Jan 17 '15 at 23:12
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No. A mutual fund is nothing like an IPO. The price of the fund shares will always reflect the value of the underlying stock, and new money coming in with continue to be invested the same way, i.e. by those managers trying to achieve their stated objective. If on the open day, the demand is great, the next day the fund will have a huge influx of new funds to invest. This would have zero impact on the share price.

In response to the comment below, this is a snapshot of a transaction form on Schwab.com

enter image description here

SNXFX is an index created by Schwab for their Schwab 1000 stock index. While "Units" may be technically correct, (I'd agree) it's normal to call these shares, and even the broker's site won't always attempt otherwise.

  • Funds have units not shares – Pepone Jan 18 '15 at 13:36
  • @Pepone that depends. Here in the Philippines mutual funds have shares. – jcm Jan 18 '15 at 14:45
  • @jcm typically that an investment trust or an investment company fund is normally in English usage a fund implies an open ended fund that doesn't trade on an exchange like say RIT does on the FTSE – Pepone Jan 18 '15 at 15:06

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