Interactive Investor Funds Builder Vs Multimanager funds.

fimonkey

Further to my last thread on multi-manager funds here: http://forums.moneysavingexpert.com/showthread.html?t=1404415

I've now come across this site http://www.iii.co.uk/funds/?type=builder which appears to allow 'investments' of as little as £20pm with no initial charge (am I right)? In which case, it is clearly more of wht I'm looking for as opopsed to the H&L policy of only allowing a minumum of £100 per month investment.

(Or have I utterly misunderstood)?

As before, my questions are:
1. Are the fee's and charges reasonable for the Interactive Investor Funds Builder (IIFB)?
2. I plan to hold my 'investments' in a S&S ISA which seems feasbile within this site, and also that they do not charge a fee for their S&S ISA. Sounds great! Its it really?

My other question is regarding which funds to choose. I constantly hear the top fund managers names bandied around in the press (Neil Woodford etc). Are they really as great as the press make out? If so, why do other fund managers even bother? - Surely I should just choose the funds managed by these demi-gods?

Finally, I've asked this in reply to another thread, but here it is again. Are 'funds' better than FTSE 100 trackers in the long term? (Looking for capital growth, not income).

Many thanks in advance once again.

cloud_dog

fimonkey wrote: »

Finally, I've asked this in reply to another thread, but here it is again. Are 'funds' better than FTSE 100 trackers in the long term?

You're not going to get a sensible answer to this one, well Donut may answer it, but............ no, you're not going to get a sensible answer to it.

There are sooooo many factors involved with your perception of investment, the time you want to spend on investments. Me I'd go with a top ranking Fund Manager but thats just my opinion.

fimonkey

Lol, actually Dunstoh answered it very nicely for me here: http://forums.moneysavingexpert.com/showthread.html?t=1409153&page=2 post #26. and donut has yet to contradict him ;-)


I also presume that with this kind of investment (IIFB) the charges per fund need to be added together (as per the MM fund and as stated in post # 42 in this thread http://forums.moneysavingexpert.com/showthread.html?t=1404415&page=3)?

So perhaps this isnt a great way of doing business either then?


(or perhaps I'm too dense to get it and should jsut stick to cash under the mattress).

cloud_dog

You need to be aware that there are two sets of charges levied on a fund the initial charge, can be up to 5% and the Annual Management Charge (AMC), anywhere from 0.02 to well, more.

Most invesment providers (iii) will discount the initial charge, sometimes up to the full 5%.

Wrt the AMC you dont add all the charges together you just add the Fund of Fund charge on to the mean of you underlying fund AMC.

Wrt the IIFB, I wouldn't be so quick to discount it. It appears to offer exactly what you want with low initial investment limits and flexibility in choices and amounts.

Whilst yes, you would incur additional charges for this type of provision perhaps, taking in to consideration your circumstances, it might be worth while to start with it.

As an example, a while ago I wanted to invest in an Asian fund, the one I idetified was First State fund, unfortunately this fund was extremely popular and the Fund Managers had decided to stop refunding the inital charges so as to make investing in to the fund for new monies less attractive. Needless to say I ignored this and continued with my investment. Sometimes charges are not the 'be all and end all'.

Lokolo

^^ also, to go as Cloud said. My first fund I chose is a 'fund of funds'. Yes whilst it is the 'lazy' approach, I am trying to learn so these sort of things help me. The New Star fund of fund I picked doesn't just buy into funds, the manager does a bit of both picking individial companies as well as other funds.

Its a starting point. However my next funds will be completely clean slated and going to be individual.

fimonkey

and just to clarify, you both beleive in the long term (mni 5 years) this will give you better returns (capital growth as opposed to income) than putting your money into a savings account (either fixed over a longer period or moving it about as necessary) with compounded interest?

cloud_dog

fimonkey wrote: »

and just to clarify, you both beleive in the long term (mni 5 years) this will give you better returns (capital growth as opposed to income) than putting your money into a savings account (either fixed over a longer period or moving it about as necessary) with compounded interest?

I'm more of an investment person. I have savings for a rainy day but otherwise I see it as pretty much dead money. I'm sure as time goes on the percentage in equities will reduce and the amount in savings, fixed interest, bonds, etc will increase.

Regarding 'growth' there is a train of thought that you shouldn't discount income funds even though you are looking for growth. I'm not sure if its Ed Investor who's a big fan on this theme.