S&S ISA suggestions please.

grumpycrab

Hi. Think its about time I used my equity ISA allowance (cash ISA already used).
Especially as some funds appear to be closing soon (or did I dream that up?)
Newbie needs some suggestions. My requirements are simple (I think so anyway).
- I'm looking to build a portfolio for the long term
- I'm definitely a cautious, low-risk taker. Can I be more specific? I want to contribute at least the min equity allowance each year for 10 years; I'd rather not see a capital reduction in that 10 years
- aims? to beat the equivalent cash savings growth over the same period; I'm not asking the earth am I?

So need a nice simple starter equity ISA where the initial funds are (mainly) picked for me; don't want large charges (although I do realise that my starting amount is small and so the initial charges may be a pain);
But some future flexibility would be nice if I get off my *rse and read up a bit about investments.
Cheers.

dunstonh

Especially as some funds appear to be closing soon (or did I dream that up?)

I think you dreamed that one. Not unless you are looking at limited tranche investments (structured products).

- I'm definitely a cautious, low-risk taker. Can I be more specific?

Yes you can. One persons cautious is anothers high risk. You need to put your risk profile in context. A simple but basic way of doing this is to say how much your loss tolerance is. e.g. How much would you have to lose before you call it a day?

So need a nice simple starter equity ISA where the initial funds are (mainly) picked for me

That means you need an IFA as only advisers can recommend funds (tied advisers cant).

ut some future flexibility would be nice if I get off my *rse and read up a bit about investments.

not a problem if you use investment funds. Most are open ended and able to switch between them.

snarffie

I had the same questions as you earlier this year, and I decided to start with a UK index tracker with L&G as it seemed to have a low (I thought it was at the time, anyway!) annual fee of 0.5%. I did this through Quidco and got £85 from them as well.

When the new tax year started, I opened a Shares ISA with iii. Within this ISA, I now have a Fidelity Moneybuilder, which tracks the FTSE All-Share and has a low annual charge of 0.1% and a TER (Total Expense Ratio) of 0.27% against L&G's approx 0.65% (I think). I did look at ETF's, but felt that for the time being, the Moneybuilder was cheap enough for the smallish amount I have invested.

I decided that I wanted to take a little more risk and bought into an emerging markets fund (comparatively high annual charge, but hopefully better returns), and also some bank shares. All investments have risen far in excess of any cash isa's I could ever get my hands on (between 9-50%), although I do appreciate that my timing was simply very lucky.

The problem with going for a fund/shares against a simple tracker is that you need to do a lot more research as the chances of picking a dud is far greater than if you just go for a tracker (although the gains are potentially higher too).

To illustrate this, my poorest performing investment is not the shares I picked myself, nor the basic tracker....it is the MANAGED fund for which I am paying an 'expert' 1.75% per annum!


One thing to watch out for with an online broker such as iii is the individual charges. For example, it costs £10.50 EVERY time you put money into a tracker/fund/shares (You also have to pay to sell your shares/fund/tracker). Doing this for small amounts will immediately put you in a situation where making a profit will be effectively impossible. To combat this, brokers such as iii for example allow you to set up a monthly payment at a cost of £1.50 per transaction using it's portfolio or fund builder. If you will be drip feeding, you should look out for brokers who offer this kind of facility. Of course, if you were going to put £5,000 into barclays in one go, then a £10.50 fee would be a drop in the ocean! Also, some brokers (H&L I think) don't charge transaction fees for investing in funds.

BTW, I don't work for iii, I just have my isa with them! You could try selftrade/halifax sharebuilder/Hargreaves Lansdown or any other isa providers suggested here. I just chose iii because they don't charge any fees for the isa, have fairly low transaction fees, and give me access to most of the investment vehicles I could ever want.

snarff