My first investment...

john_s_2

I posted on here a while back to say that I was considering buying an S&S ISA. I'm now on the cusp of doing so! But to say I'm bewildered by the range of funds available is an understatement...

I've read all the arguments for and against tracker funds (mostly on here) and am still undecided. But I'm erring towards a managed fund. Ideally I think I should pay an IFA for advice but I'm guessing that this will cost a good hundred or so? I'm only looking at dripping £50 pcm so I don't think this is really worthwhile.

Long story short, I'm considering one of these two funds:

The Fidelity Special Situations, the management charge is 1.50%. It is in the 12th %ile in 2009 and has consistently beaten the category index (UK Equity Large Value) since 2002 (except in 2006), and by more than 1.5%. The manager has been with it since Jan 2008.

http://www.fidelity.co.uk/cgi-bin/direct/iframe/iframeparent.cgi?sid=0387510

In contrast, there is also the Fidelity MoneyBuilder UK Index, the management charge is 0.10%. It is in the 62nd %ile in 2009 and has been there or thereabouts compared to the category index (UK Equity Large Value) since 2002. The manager has been with it since April 2004.

http://www.fidelity.co.uk/cgi-bin/direct/iframe/iframeparent.cgi?sid=0387532

I daresay I'm making some naive comparisons here. I suppose I'm asking what else should I be considering? (I suspect a life's research worth!)

The first fund has consistent good performance (compared to the category its been placed in), which I think justifies the higher charge. The second fund seems to do what it says on the tin (in its objectives): it tracks its index (FTSE All Share).

I guess I should state my objectives. I can afford £50 pcm and don't intend calling on this money for 10 years, probably longer. If I don't invest it in an S&S ISA then it will end up in cash savings. I have over six months' cash saved for those rainy days so I think now is the right time to consider something for the longer term.

TobyB_2

I was in this position a couple of years back - in discussion with an IFA - I decided to put my investment (initially a lump sum, subsequently a reular dripfeed) 50:50 into each ... don't know if that's a good decision ... I'll find out in the next 2, 5, 10 and maybe 15 years?