Stocks and Shares ISAs

Lokolo

dunstonh wrote: »

Fixed interest sector (bonds) are typically lower risk but there is a scale of risk within those that can go as high as high risk. So, you have to make sure the type of fixed interest funds you buy match your risk profile.

When sites such as Morningstar etc. state the risk of the fund, is this overall market or just the sector its in? (i.e. bonds / equities etc.)

dunstonh

I dont know about morningstar but you do have to be very careful when looking at risk on site. If they benchmark the risk on a scale that includes cash as the starting point then you can use a bit of common sense. However, some dont start at cash but start with the lowest level being risk based investments. FT I believe is one that doesnt use cash as the starting point. Financial Express (which is Trustnet) starts at cash.

Lokolo

dunstonh wrote: »

I dont know about morningstar but you do have to be very careful when looking at risk on site. If they benchmark the risk on a scale that includes cash as the starting point then you can use a bit of common sense. However, some dont start at cash but start with the lowest level being risk based investments. FT I believe is one that doesnt use cash as the starting point. Financial Express (which is Trustnet) starts at cash.

Ok thanks. I do look over most of the sites anyway to see where they place the funds. (usually they're all about the same anyway).

turbobob

Morningstar rate them compared to others in the sector. So if an emerging markets equity fund is given a "low" or "below average" risk rating that just means compared with other emerging markets funds. Here is an example of such a fund. It certainly does not mean one of these funds should be considered low risk in isolation, as emerging markets equity is a risky area.

Note Morningstar's categories are not the same as the IMA sectors.

Lokolo

turbobob wrote: »

Morningstar rate them compared to others in the sector. So if an emerging markets equity fund is given a "low" or "below average" risk rating that just means compared with other emerging markets funds. Here is an example of such a fund. It certainly does not mean one of these funds should be considered low risk in isolation, as emerging markets equity is a risky area.

Note Morningstar's categories are not the same as the IMA sectors.

Thanks thats what I wanted to know. Theres never any high risk bond funds I can seem to find lol.

I don't like the way one of my funds is now 1* with morningstar rating and 1/5 for return and consistant return with Lipper and I am -13% with it after investing for 10 months (£100 a month now) lol. I thought it was a good fund ha...

turbobob

Theres a few high risk bond funds, you could seek them out but would you want to?!

Yes, sounds a good one you have there LOL. They seem to update the star ratings frequently - I think they are just derived from a mathematical formula or something. I have one that went from five star to one star and now back to two. Their qualitative analysis is quite interesting though.

Lokolo

Well I am going for high risk funds and think it would be silly to go high risk but then have a low risk bond fund. I think I will still to M&G Strat Bond as I was looking at this a few months ago. Btw the **** fund is New Star Tactical Portfolio A Acc NAV

It used to be so good, when I buy it, it falls, falls, falls

turbobob

New Star are part of Henderson now aren't they? Are they keeping that fund intact? AFAIK pretty much all New Star funds performed relatively badly for a period before their ultimate takeover..

If you do want to go for the higher risk area of bond funds maybe emerging market bonds would be the sort of thing you are looking for? Or maybe you could look at one with a wide ranging remit like M&G Optimal Income which can invest in a range from treasury bonds to junk bonds (and even equities in a small way).