Choosing Funds for a S&S ISA

Matticus

Hello,

I've decided to start using my S&S allowance. I'm trying to keep my funds in ready cash as much as possible as I'm aiming to buy a property in the next year so I've created an account with Hargreaves Lansdown with a view to monthly saving.

I'm in quite a comfortable financial position, I have a good job, pension provision and enough savings for a cushion if things take a turn for the worse. I have some extra income that I thought could be well used to begin learning about S&S ISAs. My income is set to increase quite reasonably over the next couple of years so I should have more to play with and learning how to do that now seems like a good idea. I'm only 23 and I'm looking for long term growth (10+ years), a sort of regular saver that I run on a standing order and then review the portfolio every six months or so would be ideal.

With this in mind I'm not hugely risk adverse, I'd suffer losses of up to about 80% before I contemplated jumping.

In a moment of uncharacteristic impetuousness I've set it up so I'm currently saving £50 in FTSE250 and JPM Emerging Markets (Acc), and I have to admit this was after limited research, certainly not as thorough as it should have been.

The FTSE tracker seems a reasonably safe bet for long term growth (until the next crash of course!) and the emerging markets is just to be a bit more adventurous and get some global exposure.

At the moment I'm completely exposed to equities, according the h-l portfolio analysis I'm 47.1% UK Shares & 46.1% Int'l shares. So should I be worried about this, as I'm only saving a small amount per month at the moment should I just plough it into two funds (I'm open to changing them if these are completely inappropriate) or should I pick a different two each month and get some more exposure to different asset classes?

Thanks for any suggestions you might have,

Matt

Matticus

Any takers?

ozzage

Maybe I'm misunderstanding, but it seems that your whole setup is a contradiction between keeping your money available and safe to buy a property, and sticking it in high-risk funds...

How does the 10+ year outlook tie in with the property purchase exactly?

Matticus

The S&S ISA is a regular contribution of only £100 / month, the rest of my savings are in a cash ISA to keep it readily available. I'm planning for the stocks and shares to be a long term vehicle hopefully increasing the monthly contribution or adding a lump sum when I can afford to.

Hope this answers your question ozzage!

Kay_Peel

You could have a look at some models (ranging from 'defensive' to 'aggressive growth') on websites like BestInvest:

http://www.bestinvest.co.uk/multiasset/index.aspx

Pick the model that chimes with your objectives and then have a look at how they've balanced their portfolios - across countries, across types of funds and across asset classes (equities, bonds and property). That's the sort of balance that you should be aiming for.

I'm not saying that you should go for any of those Funds (quite the reverse!) - you can build up your own portofolio after doing your research - I'm just saying that it's a useful way of seeing how the 'experts' approach the balancing act.

jamesd

Given your high risk view I suggest skipping the UK for the moment and using say 50% Neptune Global Equity and the existing 50% in JPM Emerging Markets or perhaps Aberdeen Emerging Markets. When you're in a position to add another £50 a month you could add something like Invesco Perpetual Income or M&G Recovery (if it's still a recovery situation for the world economy at the time).

If you see a trend of the Pound making a long term recovery in value against the major world currencies you could temporarily switch back to the UK to exploit that.

Matticus

Thanks for the responses, that website was exactly what I was looking for, Kay.

I saw a similar thing on Hargreaves Lansdown that was quite useful, about constructing different portfolios for different risk levels.

I'll take a look at the funds you mention james, I'd looked into Aberdeen before but settled on JPM, I'll have another look.

Thanks,

Matt