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Let’s do launch

Likewise, my only problem with the tremendously user-friendly Vantage Isa is that I do not have nearly as much to invest as I would like and I guess you cannot really blame Bristol’s finest for that. But – look, there it was – then there is the marketing, the correspondence, those small dead baby trees. What with my day job having really quite a lot to do with how financial advisers choose to market themselves, I confess I was hugely impressed when I received my first letter from Hargreaves Lansdown shortly after opening my Isa account in early 2009. I was only marg-inally less enthusiastic when the second envelope arrived.

My reaction to the third letter was perhaps closer to “Steady on, chaps” and by the fourth it was definitely more a case of “OK, enough already”. After that, any envelope bearing a Hargreaves Lansdown logo went straight into the recycling bag along-side the similarly persistent and equally unopened exhortations from BSkyB that I really should consider switching to its broadband.

Until, that is, a week or two back when I absent-mindedly opened an envelope from you know who and read the opening paragraphs of a letter from no less a figure than Peter Hargreaves himself.

“Throughout my investment career, I have noticed the appeal to investors provided by new funds,” he began. “New funds tick many of the desirability boxes. Fund managers can buy exactly the stocks they want to. Usually, new launches invest in areas where the fund management group perceives there is good potential. New funds start small and are more manage-able. As a result, the track record of new funds has often been worthy of investors’ attention.”

The letter went on to acknowledge that investors do need other factors in place – “this is where Hargreaves Lansdown fits into the equation” – before detailing two fund launches the firm believes have “outstanding potential” – Aberdeen Latin American equity and Melchior European absolute return.

I was not planning to com-ment on the funds themselves although apparently I can’t help myself. You know from last week what a fan I am of Aberdeen’s emerging markets capability while I wrote about how keen I was on Brazil only last October – the month before tanks rolled onto the streets of Rio in a bid to persuade the street gangs to stop being so…gang-y.

As for Europe, you would have to think there are some amazingly priced oppor-tunities to be found there although, perhaps counter-intuitively for what has been such a volatile market, I would have to think hard about the absolute return route. After all, such funds can drag on the upside – and if Europe does head any further down this year, we will probably have bigger things to worry about than our Isas.

But back to that letter – what do we think? I am not for one moment suggesting I am being mailed the details of these two portfolios for any other reason beyond Hargreaves Lansdown’s com-plete belief in their afore-men-tioned outstanding potential and yet that stuff about fund launches for some reason makes me uncomfortable.

Partly it is my own belief that buying the stocks one wants should not be the sole preserve of the managers of new funds and partly I am not convinced small always equates to manageable. Mostly, however, and I am deeply ashamed for my cynicism, I cannot quite bring myself to share Mr H’s faith that fund management groups usually launch where they see good potential – unless, of course, it is the good potential for fund flows rather than returns.

Ah … I think it is just as well we have made it to the final paragraph. As I said, I am not terribly keen on receiving the generic letters from Har- greaves Lansdown but I would be a lot more worried about receiving a personal one.

Julian Marr is editorial director of and and co-author of Investing in emerging markets – the Bric economies and beyond


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