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HL warns of investor confusion over new Libor funds

Hargreaves Lansdown says the imminent launch of a raft of funds with Libor-based returns is likely to confuse investors already baffled by the large number of products in the market.

Credit Suisse Asset Management is offering an onshore version of its Luxemburg-domiciled target return fund which aims for a return of six-month GBP Libor plus 2.5 per cent.

HL believes other groups will follow suit but with products with very different aims and styles which will boost demand for advice from confused investors.

Investment manager Ben Yearsley says one of the major problems will be that the funds&#39 risk profiles will vary so drastically. CSAM&#39s target return product invests purely in fixed interest but other funds will be equity only, making them unsuitable for risk-averse cautious investors.

Another potential pitfall is that many funds will fall under Ucits 3 regulations, which prevents their availability through Isas. But Yearsley says the amount of explanation about how returns are both sought and calculated is likely to be the biggest challenge facing IFAs as increasing numbers of providers launch products.

He says: “Getting investors to understand the funds, which are all going to be very different, will be difficult and will require a lot of time. The funds are good in concept but there is an awful lot of explaining to do with them.”


80% of loan advisers set to quit before regulation

Eighty per cent of IFAs and mortgage brokers are considering leaving or will leave the mortgage market when regulation starts in October, according to a survey carried out by mortgage intermediary firm Cartel. Chief executive Carl Wright says he expects the volume of mortgage transactions in the UK to fall over the next 12 months […]

BBB chief Lockyer says he has saved the industry millions

Berkeley Berry Birch was forced to dump the liabilities of its subsidiary because another round of misselling claims would have brought down the whole group, says chairman and chief executive Cliff Lockyer. Defending BBB&#39s controversial decision to leave the liabilities of Berry Birch & Noble Financial Services in a wound-up company, Lockyer says that the […]

Widows reopens property funds to new investments

Scottish Widows is reopening its unit-linked life and pension property funds to new investments from the end of April. The firm suspended investment into the funds when many retail investors started to allocate 100 per cent of investments to property, leading to unprecedented cashflow into property funds. It hoped the suspension would prevent the performance […]

Many a slip twixt pup and zip

Hello, everybody! Welcome to the Rainbow house, it&#39s time to play with Zippy, Bungle, George and Geoffrey. IFAs who, like the Diary, spent most of their formative years in front of a TV, will be intrigued to learn of Intelligent Finance&#39s connection to the cult series. IF&#39s new ad campaign uses the talents of a […]

Tech winners keep on winning

By Ali Unwin, chief technology officer & fund manager, Neptune Artificial intelligence, driverless cars, big data. As technological advancements – and disruption – increasingly dominate headlines, Ali Unwin sets out six key themes he is watching in 2017. Read more Important Information Investment risks Neptune funds may have a high historic volatility rating and past performance […]


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