investing in octopus

crispy1955

Hello im new to investing and a ifa has advised me to invest £75k in a octopus investments portfolio manager, moderate capital growth, involving using an ISA wrapper, ive got a meeting soon to discuss it, but I cant find much about them on the web, i'm prepared to tie the money up for 5 or so years, and not take any out, any ideas ? your views ?
thankyou.

Reaper

Is this the product?
https://www.octopusinvestments.com/products/vctportfolio.html

If so it is investing in Venture Capital Trusts. When first set up these were considered high risk but their track record has been better than expected. Even so I woudn't put too high a proportion of my portfolio into them.

They are tax efficient. I can't say if they are suitable for you but if he is proposing 100% of your investment be with them I wouldn't say that was a good idea.

Dunstonh or one of the other IFAs will probbaly be along soon and will be able to give you a more definitive answer.

LongTermLurker

er, if you're under 50 it would take you 10 years to stash away £75k in an ISA. Being as VCTs have their own tax-efficiency built in, an ISA would be irrelevant - iirc if you keep them for 5 years you get something like 30% tax relief??

Not something I've looked at, and high risk, so definitely not somewhere for a high proportion of your investment. By definition, VCTs invest in small, fledgling companies, the sort that have great reliance on banks/investor relationships and great sensitivity to economic variables. Trusts share the risk, but it's still high nonetheless.

withnell

I thought this was going to be about buying an octopus when I clicked on the thread - very disappointed

D1zzy

withnell wrote: »

I thought this was going to be about buying an octopus when I clicked on the thread - very disappointed

:rotfl::rotfl::rotfl:

Rollinghome

withnell wrote: »

I thought this was going to be about buying an octopus when I clicked on the thread - very disappointed

Sounds good. I'm moving all my lolly out of ostrich farms into octopusses. Where do I send my cheque?

Ian_W

Rollinghome wrote: »

Where do I send my cheque?

Neptune Investment Managers?
:rotfl: :rotfl: :rotfl:

crispy1955

well thanks for the two serious answers, and i suppose i set myself up for the last four, but they did make me chuckle :rotfl:. this was offered as a medium risk investment, its 75% of redundancy payment, im taking early retirement and im 55 the charges per annum are estimated at 2.3% this includes annual payment to IFA, now im not that good at maths but I worked it out that this has to earn at least 8% to equal a 5.5% fixed rate building society acc after 20% tax. am I missing somthing?

Linton

crispy1955 wrote: »

well thanks for the two serious answers, and i suppose i set myself up for the last four, but they did make me chuckle :rotfl:. this was offered as a medium risk investment, its 75% of redundancy payment, im taking early retirement and im 55 the charges per annum are estimated at 2.3% this includes annual payment to IFA, now im not that good at maths but I worked it out that this has to earn at least 8% to equal a 5.5% fixed rate building society acc after 20% tax. am I missing somthing?

Yes - your 5.5% fixed rate building society acc (where can you get that??) would also be subject to income tax. But Octopus would have higher risks, ie may fall in value, which leads on to...

Are you really sure you want to put 75% of your retirement fund, assuming it is reasonably meaty and a sizable proportion of your spare wealth, into a single investment? A range of different and unrelated funds would give some protection against economic storms.

D1zzy

Had occasion today to look at the details of Octopus Eclipse Annual reports and the details of one of the companies (which I know a little about) in which they have a stake To find they had published their X million profit incorrectly as X million loss. - Typo they said..... (some typo!):eek:

You'd better hope they get their own numbers the right way round

LongTermLurker

crispy1955 wrote: »

well thanks for the two serious answers, and i suppose i set myself up for the last four, but they did make me chuckle :rotfl:. this was offered as a medium risk investment, its 75% of redundancy payment, im taking early retirement and im 55 the charges per annum are estimated at 2.3% this includes annual payment to IFA, now im not that good at maths but I worked it out that this has to earn at least 8% to equal a 5.5% fixed rate building society acc after 20% tax. am I missing somthing?

A 75% investment that costs at least 1% pa more than a good spread of investments via, say, Hargreaves Lansdown. Not the best idea I've heard...

I think you know the answer - I don't think this is the right opportunity for you. It places a very large portion of your capital in a single investment fund. I haven't looked at the product at all, but what it invests in is irrelevent - the key fact is that it's 75% in one place and it costs possibly double what you would pay for a much better balanced protfolio that would help to protect your money.

And Linton is right, interest rates are currently a long way south of 5.5% gross at the moment and will be for the forseeable future imo.