Losing money on my ISA - need to switch

MacsReturns

I really do not know anything about this type of ISA. I was recommended it by a bank advisor.

I'd appreciate some advice on what to do with this money.

First off, the issue isn't with it being an ISA - the ISA just wraps some investments and protects gains (where they are made, of course...) from tax. A bank advisor is not your friend, he's the bank's employee and probably paid on commission. He doesn't seem to have matched you with a product to suit your attitude to risk.

What has 'performed poorly' is the fund IN your ISA. The first rule (one of many 'first' rules) of investing is not to invest in things you don't understand, because you won't know whether it's doing well or badly or if you are just being ripped off.

It all depends what's in the fund as to whether it will ever recover - it might do over time, which is why you were advised to keep in it (unless that advice came from someone getting a cut of the management fees, of course ). But what is certain, though, is that if you sell out now then you have crystallised your losses. It's a judgment call whether you are cutting your losses looking ahead, though.

My advice* is 1) determine your attitude to risk, 2) find an investment to match. If you have zero tolerance to risk, a cash ISA would be better, but you'd have to swallow your losses to date and take a lower return. Only risk what you can afford to lose.

* I'm not an advisor, my 'advice' is just my opinion

funkey_monkey

The investment fund was wide ranging across many sectors. There is nothing to do with attitude to risk - its been in there for over 9 years now. There should have been some sort of return on the original investment by this time. I am aware of the short term volatility of the shares markets.

What I'm not happy about is being sold a pup. TBH I feel I could have done a whole lot better, and definitely not worse than the so called 'experts'.

dunstonh

The investment fund was wide ranging across many sectors. There is nothing to do with attitude to risk - its been in there for over 9 years now. There should have been some sort of return on the original investment by this time.

First thing to note is that it is not wide ranging across many sectors. The fund is in the UK all companies sector. Over 80% of its holdings are UK. The UK has been a pretty awful place to invest since 1997 (not unusual under a Labour Govt).

Why should there have been a return over 9 years when you had the bulk of the dot.com crash which saw the fund lose 40% in the first 2 years and the more recent global recession which saw the fund lose 60% from peak to trough.

Have you actually got an up to date valuation as this time last year you would probably have been in a loss. However, now I wouldn't expect you to be in a loss position now. ( year figures show the fund up 18.21% (compared to 31.17% as sector average).

What I'm not happy about is being sold a pup. TBH I feel I could have done a whole lot better, and definitely not worse than the so called 'experts'.

there is nothing expert about the recommendation to use just one fund in one sector. Whilst it slightly underperformed last year it over performed after the dot.com crash. However, it was in general in line with the performance of the UK All companies sector.