The Aberdeen New Dawn fund is an Investment Trust (basically, a company that invests in the shares of other companies) listed on the UK stock market that aims to provide its shareholders with capital growth through investing in companies in Asian Pacific countries excluding Japan, but including Australia.
INVESTMENT TRUSTS (IT) - general summary
IT's can be purchased either directly from IT providers or via a financial adviser, who will of course receive commission for giving advice. IT's can be purchased by investing with a lump sum or via a monthly savings scheme, and can be part of your annual ISA entitlement as either a Mini or Maxi investment (£3'000/£7'000 in this tax year, £3'600/£7'200 in 2008/09).
Because IT's issue shares, many trust providers will issue dividends based on the annual profits of the plan, which can either be re-invested in shares or taken as a cash payment.
Obviously, the value of the shares can go up as well as down, but it is fair to say that if you hold an investment such as this for more than 5 years, you should be able to iron out most fluctuations in the stock market.
ABERDEEN NEW DAWN TRUST
Aberdeen are an asset management company based in Peterborough, England. They offer a wide range of financial products including the New Dawn Trust, which can be invested in via monthly payments to a share plan (min: £100 per month) or by a lump sum (min: £1'000). These can be held within an ISA wrapper, and you can also invest for children (monthly: £30 or lump sum minimum of £150), which can also house the Child Trust Fund payments you receive on the birth of a new nipper.
The fund is managed by Hugh Young and over 5 years has grown by over 200%, which is an excellent performance by any standards. At present, the main holding in the fund (14.6%) is in Aberdeen's own Global-India Opportunities fund, with 20% of the fund held in shares of Singapore-based companies.
The fund has been well placed to capitalise on the excellent performance by some of the Asian stockmarkets over recent years and has suited investors willing to risk a slightly higher level of risk than usual in return for the chance of a higher return.
Charges seem fair; you pay 0.5% stamp duty on any purchase, £15 for any sale, and £24 per annum when held in an ISA. Investments are made the next working day, and you can hold the plan outside of an ISA for £10 per sale and just the operating costs of the plan.
OPINION
I've held shares in the fund now for almost 6 years (I'm aiming to hold for some time as part of a retirement plan), and have to say that Aberdeen's level of customer service is exceptional, with two statements per year at 6 monthly intervals, and a swift response time by either phone or mail. You can also manage your account online and get a valuation as and when required.
Obviously, returns have been good, and there has been decent dividend growth (11% last year).
My only doubts are on whether this can continue (we're obviously in for a tough time on the markets this year) on an annual basis. The past performance points out that if you are willing to hold for a long period of time, there will be gains to be made, and this has certainly been true whilst I've been a shareholder.
Aberdeen's service levels reassure me; you also receive a monthly update by e-mail which sometimes has interviews with fund managers, who are very up front and refreshingly jargon free.
As usual, take time when deciding to purchase and speak to an adviser if you need to. To me, Aberdeen are a reputable, trustworthy company and the New Dawn fund has served me well over the past few years.
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