Investment Funds

vaderag

Just met with a Financial Advisor at HSBC since i've got a bit of cash that i'm looking to get the best out of.
They spoke to me about investment funds as well as their Guarenteed Capital Account and I wondered if anyone had any advice when looking at these things?
For example, what's the difference between and income and a growth fund? And how do i know which one is best (i appreciate that there is no right or wrong answer for this, but does the fact that something performed well in the past mean that it will continue to do so, generally?)
Also, is there anywhere i can compare these things - obviously the HSBC advisor is flogging HSBC products, but i want a more balanced view!

Thanks for any help!

Lokolo

Go to an IFA if you want a real investment product. But they charge

Income - you get regular deposits of 'dividends', basically, an income.

Growth - the money got from the dividends it put back in the pot to invest more money (through the fund), hopefully making the value of your holding go up.

dunstonh

Dont see a sales rep from a bank. You need whole of market advice from an IFA.

It sounds like you could do with a bit of teaching as well and you will find most IFAs are more than happy to coach you on this to give you better understanding.

As for investment funds. Your money is pooled with other investors into "funds" which you buy units in. Funds will have different aims and objectives as well as rules. Investment funds are available unwrapped (as unit trusts) or wrapped in a tax wrapper such as ISA, pension or investment bond. The tax wrappers can give advantages to certain groups (as well as disadvantages if you get the wrong tax wrapper).

If you have a pension that is not linked to a final salary then you almost certainly have investment funds for that.

does the fact that something performed well in the past mean that it will continue to do so, generally?

No. Past performance is no indication of future returns. When building a portfolio (which the HSBC rep cant do) you look at future potential. When making investment recommendations you may look at consistency of a fund manager over the long term. However, you also look at other things (including the risk of the fund). There is also the view that what goes down comes up and what goes up comes down. Sometimes focusing at the bottom end of the tables can see some good value for the future. However, thats starting to get more complicated and you are not there yet