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  • FIRST POST
    • MSE Amy
    • By MSE Amy 15th Apr 14, 6:25 PM
    • 27Posts
    • 36Thanks
    MSE Amy
    Stocks & Shares ISAs
    • #1
    • 15th Apr 14, 6:25 PM
    Stocks & Shares ISAs 15th Apr 14 at 6:25 PM
    Hi!

    This is the discussion thread for the


    Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
Page 19
    • dunstonh
    • By dunstonh 3rd Feb 17, 11:49 AM
    • 87,313 Posts
    • 52,486 Thanks
    dunstonh
    Is there any sites that show comparisons between managed fund performance. can find plenty on costs but nothing which shows how various managed funds are actually performing.
    Originally posted by Koj
    Trustnet. Morningstar to name the two big ones.

    However, do be aware that past performance of funds in a sector is not all equal. Higher risk funds in a sector will be expected to outperform lower risk ones in a growth period. Lower risk funds will typically outperform higher risk ones in a negative period.

    So, you have to look at the risk of each fund and performance relative to that risk to see if it is offering value or not.

    To give you an idea of the risk spread, the Mixed 40-85% equity sector has funds covering 6 different risk profiles on our 1-10 scale. The fund coming in way down the list in terms of performance could be the most suitable fund for you.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Koj
    • By Koj 4th Feb 17, 9:31 AM
    • 8 Posts
    • 1 Thanks
    Koj
    Comparison
    Hi was looking at Lloyd's managed funds in their isa wrapper but can't find any info on them when doing a search for Lloyd's. I presume they may go under a different name.
    • dunstonh
    • By dunstonh 4th Feb 17, 11:25 AM
    • 87,313 Posts
    • 52,486 Thanks
    dunstonh
    Hi was looking at Lloyd's managed funds in their isa wrapper but can't find any info on them when doing a search for Lloyd's. I presume they may go under a different name.
    Originally posted by Koj
    Lloyds have never retailed under the Lloyds Bank name. They did a bit under Black Horse Life and a period as LTSB but after they bought Scottish Widows (and went on to turn it from a very good company into a near basket case) they branded everything under the Scottish Widows name.

    When looking at the tables, expect to find their funds near bottom.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • confusedstarter
    • By confusedstarter 13th Feb 17, 9:58 PM
    • 1 Posts
    • 0 Thanks
    confusedstarter
    Please help, confused about the S&S ISA
    Hi All,

    I need your help, i have moved jobs too much and this has meant that i have never really been able to build up a decent pension. i am not close to 40 and worried that i do not have enough for the rainy day. I ready the S&S ISA blog MSE and i am now even more confused. should i just put all my money in CASH ISA (which doesnt help me grow anything) or do i put in a fund outside of a ISA and do stocks and shares through that ?

    I came to the blog thinking that CASH ISA was not going to help me grow a useful amount by the time i need to retire. I believe i would be in the high rate income tax band (a very recent occurrence)

    my current pension projection says that the company pension would allow me 4K - 5K /per year income when i retire which doesnt seem like much after 40+years of working!
    • dunstonh
    • By dunstonh 13th Feb 17, 10:35 PM
    • 87,313 Posts
    • 52,486 Thanks
    dunstonh
    my current pension projection says that the company pension would allow me 4K - 5K /per year income when i retire which doesnt seem like much after 40+years of working!
    Pensions, like any investment, are only as good as what you pay into them. Pay in peanuts, get back peanuts. However, projections tend to understate the likely outcome nowadays and put them in todays terms. So, the amount you will actually get will be higher although it showing todays spending power.

    believe i would be in the high rate income tax band (a very recent occurrence)

    So, pension better given the higher rate relief you would get?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • jimjames
    • By jimjames 13th Feb 17, 11:07 PM
    • 11,696 Posts
    • 9,992 Thanks
    jimjames
    I came to the blog thinking that CASH ISA was not going to help me grow a useful amount by the time i need to retire.
    Originally posted by confusedstarter
    You are absolutely right. Saving in cash for your pension over a large number of years is a very bad idea. Which form of investments is the better option depends on a number of factors as Dunstonh has suggested
    Remember the saying: if it looks too good to be true it almost certainly is.
    • philjo
    • By philjo 8th Mar 17, 9:56 PM
    • 3 Posts
    • 0 Thanks
    philjo
    I am reviewing my current holdings. my stocks & shares ISA is with HSBC - in the HSBC UK Growth and Income fund (it was originally the HSBC Household names ISA when I took it out) - I have had this policy for a number of years now.

    I currently pay £100 per month into this. until recently I tended to max out the cash ISA allowance & just pay a small amount into the stocks & shares isa but now thinking of chaning the balance due to the low interest rates on the cash ISAs (& the total allowance is shortly getting close to my total spare income anyway so would be be paying max amount any more)
    looking at other performance it seems to be below average recently. Just wondering if there were better funds or providers I should be considering.

    Many thanks,
    • bananas1
    • By bananas1 11th Mar 17, 12:44 AM
    • 1 Posts
    • 0 Thanks
    bananas1
    Lloyds own Halifax which itself owns iWeb. In this case, it might make sense if they didn't also offer their own broker.
    Last edited by bananas1; 11-03-2017 at 12:49 AM.
    • masonic
    • By masonic 11th Mar 17, 7:39 AM
    • 9,101 Posts
    • 6,233 Thanks
    masonic
    I am reviewing my current holdings. my stocks & shares ISA is with HSBC - in the HSBC UK Growth and Income fund (it was originally the HSBC Household names ISA when I took it out) - I have had this policy for a number of years now.

    I currently pay £100 per month into this. until recently I tended to max out the cash ISA allowance & just pay a small amount into the stocks & shares isa but now thinking of chaning the balance due to the low interest rates on the cash ISAs (& the total allowance is shortly getting close to my total spare income anyway so would be be paying max amount any more)
    looking at other performance it seems to be below average recently. Just wondering if there were better funds or providers I should be considering.
    Originally posted by philjo
    Investing in just a UK fund is not a very sensible strategy, so it is worth considering a change just to address that point. If you want a single fund for simplicity, then it would be sensible to opt for a multi asset fund, which spreads your money across different regions of the world and different asset classes - not just shares. Examples of low cost passive funds include L&G Multi index, Vanguard LifeStrategy and Blackrock Consensus. You will probably need to transfer to a different provider to gain access to these choices.
    • katieks
    • By katieks 19th Mar 17, 11:23 AM
    • 22 Posts
    • 3 Thanks
    katieks
    Moving money away from managed ISA provider after 1 year
    Hi, new to all this. I was thinking of taking up the Moneyfarm S&S ISA offer for a year then moving elsewhere, probably somewhere with no management fees as hopefully I'd have a bit more of a clue what I'm doing by then and more time to devote to it.

    My question is whether I'd have to change the funds or can I just change the platform? I.e. everyone says invest for 5yrs+ but doing it this way, would I be investing for just 1 year and then need to change all the shares thereby losing that benefit of riding out the bumps by investing for longer? Or can I move away from Moneyfarm but keep my shares/funds/whatever already bought and manage them myself with a different platform?

    Thanks in advance.
    • masonic
    • By masonic 19th Mar 17, 11:36 AM
    • 9,101 Posts
    • 6,233 Thanks
    masonic
    Moving from one fund to a different, roughly equivalent, fund does not lose the benefits of long term investing. You may be out of the market for a few days, which is not ideal, but not a significant problem.
    • dunstonh
    • By dunstonh 19th Mar 17, 11:41 AM
    • 87,313 Posts
    • 52,486 Thanks
    dunstonh
    I was thinking of taking up the Moneyfarm S&S ISA offer for a year then moving elsewhere, probably somewhere with no management fees as hopefully I'd have a bit more of a clue what I'm doing by then and more time to devote to it.
    You wont save charges doing that. Moneyfarm is also not a conventional investment option. It is a robo-advice pre built solution.

    My question is whether I'd have to change the funds or can I just change the platform?
    Moneyfarm is not a platform.

    I.e. everyone says invest for 5yrs+ but doing it this way, would I be investing for just 1 year and then need to change all the shares thereby losing that benefit of riding out the bumps by investing for longer?
    Moving your investments but remaining invested is still being invested.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • katieks
    • By katieks 19th Mar 17, 12:15 PM
    • 22 Posts
    • 3 Thanks
    katieks
    Thanks for replies. If Moneyfarm not a platform, do I need to pay separately for a platform too? The summary MSE article doesn't include this in their fees for them. I appreciate they're 'robo-advice' whatever but even using their algorithms is likely to perform better than me with very little idea of the moment and will give me an opportunity to get into the stock market and be able to see how it works without having to know too much myself and all this for free management fees. If you have a better suggestion Dunsonh as I'd be very grateful as I just want to make my savings work harder than the paltry savings rates on offer with a cash ISA. I've already got Regular Savers and Santander account, etc. But for the hassle of opening new accounts, credit checks, etc to be able to save 3k at slightly more - I just don't have time for that.

    I got some advice off a financial adviser and for them to manage the fund cost a lot. 4.5% initial investment fee then ongoing 1.5% per annum. Apparently your money does very well investing with them, but it just seemed too much for me. Maybe they were an expensive one. Also spoke to another financial advisor who said he doesn't really do investments <50k. I don't want to invest that much just yet. Was thinking of 20k max at present.

    Thanks in advance.
    • katieks
    • By katieks 19th Mar 17, 12:23 PM
    • 22 Posts
    • 3 Thanks
    katieks
    And also, I have no idea what I can expect in terms of returns from a general low-med level risk investment in a mixed UK and Europe fund. 0.35% fees is a lot if the increase is only 1% but not if it's 3% - I Googled FTSE 100 rate increase and I can't make sense of it. The other thing is I have a 1.94% mortgage. At the moment I'm hoping investing in stock market will outweigh this i.e. I can earn a higher return than paying off mortgage. Am I mistaken in this? It's unfortunately not a mortgage where I can get back to the money easily if I make overpayments.
    • masonic
    • By masonic 19th Mar 17, 1:15 PM
    • 9,101 Posts
    • 6,233 Thanks
    masonic
    Thanks for replies. If Moneyfarm not a platform, do I need to pay separately for a platform too? The summary MSE article doesn't include this in their fees for them.
    Originally posted by katieks
    It is a self-contained solution, so there is no platform in this case. I wouldn't use MSE guides when it comes to investments. It really isn't where their strengths lie. They probably have a correct summary of the charges, but it does not necessarily include the best options.

    I appreciate they're 'robo-advice' whatever but even using their algorithms is likely to perform better than me with very little idea of the moment and will give me an opportunity to get into the stock market and be able to see how it works without having to know too much myself and all this for free management fees.
    There really isn't any evidence that these robo-advice strategies perform any better than a fixed allocation strategy. Taking Nutmeg as an example, it seemed to under-perform in its managed portfolios and later released cheaper fixed allocation portfolios. You also have options like Vanguard Lifestrategy and L&G multi index that can be held in a platform, possibly for even lower costs (less than 0.5% overall).

    And also, I have no idea what I can expect in terms of returns from a general low-med level risk investment in a mixed UK and Europe fund. 0.35% fees is a lot if the increase is only 1% but not if it's 3% - I Googled FTSE 100 rate increase and I can't make sense of it. The other thing is I have a 1.94% mortgage. At the moment I'm hoping investing in stock market will outweigh this i.e. I can earn a higher return than paying off mortgage. Am I mistaken in this? It's unfortunately not a mortgage where I can get back to the money easily if I make overpayments.
    Originally posted by katieks
    Investing will tend to deliver high returns with high variability. Over a sufficiently long period, it will tend to work out a lot better than 1.94% - typically 5%+inflation is used as a guideline for equities.

    Investing in the UK and Europe only is not very sensible. You should be looking at something more global, possibly including bonds and maybe even property.

    Smarter Investing by Tim Hale makes very good reading if you want to understand these things.
    • dunstonh
    • By dunstonh 19th Mar 17, 2:29 PM
    • 87,313 Posts
    • 52,486 Thanks
    dunstonh
    The summary MSE article doesn't include this in their fees for them.
    MSE has always been poor on the investment side of things. The articles are not a good source of info. This section is far better. Even when posters disagree on things (and investing is often about opinion) you still get decent discussion on the whole and get to see all sides.

    I appreciate they're 'robo-advice' whatever but even using their algorithms is likely to perform better than me with very little idea of the moment and will give me an opportunity to get into the stock market and be able to see how it works without having to know too much myself and all this for free management fees.
    Are you sure? We have a robo offering for those that want it. It uses the L&G multi-index fund range (class C). That same fund is available direct from L&G or on platforms. So, why not buy a multi-asset fund on platform (not suggesting L&G - just used that to point out that robo solutions are similar to active passives multi-asset funds)

    I got some advice off a financial adviser and for them to manage the fund cost a lot. 4.5% initial investment fee then ongoing 1.5% per annum. Apparently your money does very well investing with them, but it just seemed too much for me. Maybe they were an expensive one. Also spoke to another financial advisor who said he doesn't really do investments <50k. I don't want to invest that much just yet. Was thinking of 20k max at present.
    IFA portfolios often beat these solutions. However, IFAs are not generally interested in small investors. These robo solutions are aimed at filling the gap between those that dont want to DIY and those that cant get advice cost effectively.

    And also, I have no idea what I can expect in terms of returns from a general low-med level risk investment in a mixed UK and Europe fund. 0.35% fees is a lot if the increase is only 1% but not if it's 3% - I Googled FTSE 100 rate increase and I can't make sense of it.
    If you used a typical 1-10 scale, the FTSE100 would be up around 9. So, a low/medium is not a sensible fit with a 9 risk area. You should use like for like in terms of risk when making comparisons.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Brand
    • By Brand 20th Mar 17, 8:56 AM
    • 72 Posts
    • 20 Thanks
    Brand
    And also, I have no idea what I can expect in terms of returns from a general low-med level risk investment in a mixed UK and Europe fund. 0.35% fees is a lot if the increase is only 1% but not if it's 3% - I Googled FTSE 100 rate increase and I can't make sense of it. The other thing is I have a 1.94% mortgage. At the moment I'm hoping investing in stock market will outweigh this i.e. I can earn a higher return than paying off mortgage. Am I mistaken in this? It's unfortunately not a mortgage where I can get back to the money easily if I make overpayments.
    Originally posted by katieks
    Katieks
    1. you are "hoping" for 3%+, so what happens to mortgage payments if it doesn't return 3%+ in any one year or even loses money? stockmarket returns are fickle.
    2. I can see your view, but sometimes these clever approaches in finance come a cropper.
    3. Moneyfarm is like buying a fund directly from an asset manager.
    If you want to transfer, then you simply transfer out to another ISA provider, like any other ISA transfer, so yes you might be uninvested for a few days.
    4. Instead of buying shares, it buys a selection of ETFs, so is like a fund of funds, and thus is spread over a very large number of companies.
    5. The diversification is even larger as it includes global ETFs. It chooses and holds the ETFs on your behalf and tweaks them according to its view of the economy.
    6. For a new investor or someone who does not want to follow it too closely, it should be a comfort to have someone doing this, so I think it is a reasonably good choice of first investment for a hands-off investor.
    7. Given that it is a new fund, I would guess it will give a lot of attention to the fund to try to make it do well.
    8. I think with charges you have to think what they need to do the job properly and what would it cost me to do it independently.
    It chooses the ETFs according to the level of risk you say you are, and also the smaller the amount of money you put in, the less risk it will give you.
    9. For all but the most adventurous category, it reduces risk by increasing the amount of bond and fixed interest ETFs.
    10. That is really a key point as you have to be sure in your mind that you agree with the moneyfarm fund manager (and the industry consensus on what a low/medium risk stockmarket investment is) that you need a substantial proportion invested in bonds and fixed interest, especially at a time of very low interest rates.
    You either need to have a view on this assumption yourself, or else trust the view of the moneyfarm manager.
    (To me, a person either wants the risk of the gyrations of the shares and the stockmarket or does not, and, if so, should not get involved with bonds etc. so in moneyfarm terrms, I would have to mark myself as rather high risk rather than medium risk. )
    • atruefaker
    • By atruefaker 30th Mar 17, 4:46 PM
    • 113 Posts
    • 15 Thanks
    atruefaker
    Advice for a novice
    Hello All

    I am new to this even though I have a stocks and shares ISA with Santander for a while. I didn't really know what I was doing when I was sent to see the advisor. I believe it has a fund manager overseeing,etc. I haven't paid into it for a while and I am not sure if I have actually had any return.

    I am trying to sort this out and look at how best to improve this pitfall. I have noticed from a few posts there is mention of some good advisors on here. Would anyone be able to point me in the right direction?

    Thanks in advance.
    • temartin123
    • By temartin123 9th Apr 17, 9:00 AM
    • 1 Posts
    • 0 Thanks
    temartin123
    Why do you not mention trading fees on Shares? Many investors won't have the capital that is often required as a minimum initial investment for a lot of funds, so will want to invest in ETFs.
    • masonic
    • By masonic 9th Apr 17, 9:58 AM
    • 9,101 Posts
    • 6,233 Thanks
    masonic
    Why do you not mention trading fees on Shares? Many investors won't have the capital that is often required as a minimum initial investment for a lot of funds, so will want to invest in ETFs.
    Originally posted by temartin123
    For funds, you can go as low as £100 at some platforms, and for a regular investing plan £25 per month is possible. If someone doesn't have either a £100 lump sum to invest in each fund, or £25 per month per fund, then maybe they they are better off saving in cash until they do.

    But, comparing these minimums, funds (OEICs/UTs) would tend to be preferred over ETFs. ETFs become increasingly beneficial for larger investments.

    Lump sum of £100 (First year cost - 45p for a fund, £6 for an ETF)
    OEIC/UT
    Trading cost = £0
    Annual platform cost = £0.45 (0.45% platform charge - HL)

    ETF
    Trading cost = £6 (broker with no holding charges - XO)
    Annual platform cost = £0

    Monthly investment of £25 (First year cost - 80p for a fund, ~£19 for an ETF)
    OEIC/UT
    Trading cost = £0
    Annual platform cost = ~£0.80

    ETF
    Trading cost = £18 (platform with cheap regular monthly investing option at £1.50)
    Annual platform cost = ~£0.80
    Last edited by masonic; 09-04-2017 at 10:25 AM.
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