FTSE All-Share Tracker - Decent short term investment?

adamzetec

I'm looking for some advice regarding a short term investment. Having saved up my house deposit i'm looking to earn more interest than I would otherwise do in an ISA (I currently have the majority of my deposit split across various ISAs). However, I do have a lump sum upto £10k which is currently sitting in a high interest account paying 1.1% interest.

I'm not adverse to risk, i'm completely understand the fact that my investment can go up as well as down. Having studied the FTSE All-Share, it seems like it is slowly recovering after being hammered over the past year.

Would a FTSE All-Share tracker (managed by fidelity etc) be a good short term investment? I have the tools available to me to keep an eye on the index throughout the day although being new to this type of investment, I don't know the ins and outs.

I presume i'm not tied into any kind of contract? I need to be able to cash in my investment within a week or so. Also, if I did want to cash in my investment, how much notice would I need to give? Does this vary depending on the fund itself?

opinions4u

Could you afford to lose 30%+ of your money?

If at the time you need your funds they've dropped to £7,000 or less, how would that impact your plans?

You should be able to find an instant access account paying 2.5%+.

Aegis

adamzetec wrote: »

I'm looking for some advice regarding a short term investment. Having saved up my house deposit i'm looking to earn more interest than I would otherwise do in an ISA (I currently have the majority of my deposit split across various ISAs). However, I do have a lump sum upto £10k which is currently sitting in a high interest account paying 1.1% interest.

I'm not adverse to risk, i'm completely understand the fact that my investment can go up as well as down. Having studied the FTSE All-Share, it seems like it is slowly recovering after being hammered over the past year.

Would a FTSE All-Share tracker (managed by fidelity etc) be a good short term investment? I have the tools available to me to keep an eye on the index throughout the day although being new to this type of investment, I don't know the ins and outs.

I presume i'm not tied into any kind of contract? I need to be able to cash in my investment within a week or so. Also, if I did want to cash in my investment, how much notice would I need to give? Does this vary depending on the fund itself?

This sounds like a very bad plan. If you need the money any time soon, investing into a volatile asset class is not a great plan because you could easily see substantial chunks of your investment disappear over the course of a few days. It might recover, but then again it might not.

For short term investments (i.e. less than 5 years) you'd be better off sticking with guaranteed accounts, either cash or short term structured products. As structured products have a tie in and a usual minimum of about 3.5 years, I'd say you'll be better off in cash unless you're already good at short term trading. The fact that you're considering an index tracker tells me that, like myself, you're not.

Sorry, if you need the money soon, this is almost certainly not the product for you.

nrsql

>> I'm not adverse to risk, i'm completely understand the fact that my investment can go up as well as down. Having studied the FTSE All-Share, it seems like it is slowly recovering after being hammered over the past year.

If that's the case then you've probably answered your question. You understand the risk and think it's going to be profitable then why not?
I've been doing a similar thing with banking shares and it's been quite profitable.

It depends how you invest but you should be able to get out of the market within a day or two. Receiving the funds is a different matter but I would allow at least a week.

Personally I wouldn't do this with any funds that I couldn't afford to lose. At the moment I think it unlikely that it would go down by the 30% suggested - but then I also don't generally agree with the 5 year timescale - that all depends on timing, it's probably reasonable at the moment but most of the time when people are thinking of investing I would say more like 20 years (actually don't rather than 20 years).

purch

Would a FTSE All-Share tracker (managed by fidelity etc) be a good short term investment?

No..............your ability to move into and out of the Investment is not quick and easy enough for you to control over the short term.

You would have more 'control' is you used an ETF as the tracking vehicle, as you can access 'real time' prices, but again in the short term these would still not be the ideal vehicle.

adamzetec

Thanks for the advice, it seems that this isn't the right investment given my situation. I certainly think this fund has legs, how long should one look to keep the investment in a fund such as this?

kingmonkey

People talk about 5 years minimum, but I think 15-20 years is more realistic.

May I ask, why you think the FTSE all share has legs? Which sector is going to perform well? And why not just put your money into that sector?

tradetime

Sounds like a risky endeavour for a novice, markets are very volatile at the moment and we could easily see the lows again and lower, but for the moment it does look like we want more upside, news is currently "less bad" and as long as it stays that way I think the rally has some more legs.

Purch is right in order to attempt this you would be better with an ETF, Deutche Bank do an all share tracker, but it is thinly traded, the nearest thing I can see is a FTSE 250 tracker by iShares

laffer

Tradetime: Do Deutche do an asian tracker at all which is decently traded for liquidity purposes?

tradetime

laffer wrote: »

Tradetime: Do Deutche do an asian tracker at all which is decently traded for liquidity purposes?

Deutsche Bank do a couple of broad Asian trackers, but there not particularly heavily traded. They also do country by country trackers, those aren't heavily traded either. Possibly the most liquid one I have seen on the LSE is the iShares MSCI AC Far East Ex Japan (IFFF) even it's only about 50,000 avge daily vol. The longer you are prepared to hold, the less of an issue the daily volume is, though you would need to look at the spread to see if it was acceptable. Personally I always look around for similar products with better volume if the components meet my needs, but there isn't much selection in the UK.

sabretoothtigger

lloyds do 4% interest, see the thread in this section

a year is short term, a week is a gamble which doesnt seem to match your objectives


unit trusts take about 48 hrs to cash in my experience, I think it depends on the staff but there was no timescale given to me except we'll send you a letter when its done so not very good for speculating in these times really


Ive noticed asian index funds outperform the ftse so I presume this is partially due to falls in the british pound, if £££ fall 10% against theres then that asian chart contains that 10% gap I think