cis corporate bond

celtic_3

Hi All I invested 10k in a cis corporate bond 3 years ago . The unit trust price just seems to go from bad to worse !!!So far I have not made any money infact after charges It looks as if its a complete waste of time and money .Should I hang on in there or cut my losses.
My Husband invested 7k in a uk income with growth fund but that seems to going down the pan also !!!! Where do we go now ???? All help gratefully received . These are all held under the ISA umberella

jack_spratt_2

celtic wrote: »

Hi All I invested 10k in a cis corporate bond 3 years ago . The unit trust price just seems to go from bad to worse !!!So far I have not made any money infact after charges It looks as if its a complete waste of time and money .Should I hang on in there or cut my losses.
My Husband invested 7k in a uk income with growth fund but that seems to going down the pan also !!!! Where do we go now ???? All help gratefully received . These are all held under the ISA umberella

These are classed as medium to long term products

dunstonh

Single fund investing. Always a bad move. However, ignoring that, as js above says, its long term. Not 3 years.

celtic_3

Hi I did realise it was a mid to long term investment ie 3/5 year term but after 3 + years lost money and no profit !! Concerned as to whats going to happen at this most difficult time should I stay or should I go ?????

dunstonh

Hi I did realise it was a mid to long term investment ie 3/5 year term

3-5 years is not long term. Investments are made for an absolute minimum of 5 years. Short term is less than 5 years. medium term is 5-10 years and long term is 10 years plus.

but after 3 + years lost money and no profit !!

Not unexpected and not a concern. Investments dont work by going up in a straight line. They zig zag and if you get a zag before a zig it can be disheartening but that is why you dont invest for the short term.

Concerned as to whats going to happen at this most difficult time should I stay or should I go

What difficult times are you referring to? Ok, that is slightly sarcastic but the markets are not particulary suffering at the moment in the scheme of things. At the moment we have a typical bear market. However, you are not invested in that so it doesnt matter. You went 100% into corporate bonds at time when it wasnt really the best time to be buying (wrong part of the cycle) and you went 100% into one fund house (CIS) giving you no much diversification. If you wanted 100% fixed interest fund exposure then you could have done that with a spread of corporate bonds, UK other bonds (inc high yield) and index linked bonds. However, you picked just one sector and that is never a good move as you are putting all your eggs in one basket.

What you should do will depend on what you are willing to do. You can leave it and hope it improves (outlook for fixed interest funds is quite positive at the moment). You can adjust the fund spread so you diversify more or you can call it a day. We cant make that decision for you.

celtic_3

Hi thank you for your reply and help. I dont do unsafe savings and took the advise of my cis man who I have known for many years but I suppose he was only selling me what he thought was best and as he is employed by cis it obviously was one of his products . However when I rang to request an appointment to discuss my fears another cis chappie had taken over and advised me I would have to pay again to change my investment to another fund {CIS} . I know we dont have a crystal ball and the sum is not great to a lot of people but for us it was . Anyway I suppose I should just sit tight and not even look at the unit price as I find it most distressing Thanks again

dunstonh

Hi thank you for your reply and help. I dont do unsafe savings and took the advise of my cis man who I have known for many years but I suppose he was only selling me what he thought was best and as he is employed by cis it obviously was one of his products .

Tied sales reps have different advice requirements to IFAs. His requirement is to sell the most appropriate product from their fund range (not best available overall and doenst need to be an exact match). Also, its documented that you pick the fund, unlike an IFA where they pick the funds. So, you do tend to find tied agents put all your money in just one or two funds rather than a structure.

One thing you should be aware of is that this is not a savings product. It is an investment product. If it was sold on the basis of it being savings and ok for less than 5 years then you could have a case against the CIS for bad advice. I would suspect that the documentation issued would cover their backsides on that front though.

owever when I rang to request an appointment to discuss my fears another cis chappie had taken over and advised me I would have to pay again to change my investment to another fund {CIS} .

Potentially yes. However, not always with whole of market. Many IFAs will take on funds and switch them at no cost to you. The reason is that the agent/adviser gets paid upto 0.5% of the fund value each year. At the moment CIS are getting this. If the investments were switched by an IFA the IFA would get it. Depending on the fund value the IFA may be happy to be getting the 0.5% and make the switch at no cost.

CIS investments are expensive. Even if you actually wanted a CIS fund, you can buy them cheaper from IFAs and discount brokers cheaper than buying them from a CIS rep. Bit late now in your case but anyone else reading who is considering CIS may find that useful.

Keybiz

I have just had a chat with a long standing CIS adviser. There are no charges levied for switching to an alternative fund within their range and this has been the case for a long time now.

gantymiffy

i still need a reply to my question please i have lost 3000 like most people im fed up this money is in a c.i.s uk growth fund its long term. i keep hearing about leaving it in ,but if i do that will all my remaining 9000 pounds go? were really worried any help please?

dunstonh

i keep hearing about leaving it in ,but if i do that will all my remaining 9000 pounds go?

Its possible. In the same way Russia dropping nuclear bombs on us is possible. If it got to the stage where your £9000 was worth zero then you wouldnt care. That would mean no Sterling, no companies and you would be boarding up your windows, killing people and hoarding food and water.

Much more realistic is you will continue to see ups and downs until the first signs the recession is bottoming out and then you should see growth. When and how much is something no-one knows.

gozomark

celtic wrote: »

I dont do unsafe savings

and yet you are invested in a corporate bond fund and your husband in an equity fund, neither of which are safe (or savings)

do you wish to remain in investments that could lose your money, or do you want security of your capital ?