F&C Fund Advice needed

mrsdumplin

Hi,

I need to invest my daughters CTF voucher.

I have had a look around decided to go with F&C. I am looking at the shares account only I dont know how to decide which fund to select and tell the difference between the two. I am a complete novice at this

I dont mind something medium to high risk as it's 18 years to grow. We dont intend to add to this.

Their website suggests
From Alternative
F&C Private Equity
F&C Graphite Enterprise

From Specialist
European Assets
US Smaller Companies
Global Smaller
Managed Portfolio Trust

How do you pick between them?

Any Advice/recommendations welcomed

Thanks
MrsD

wriggly

I have invested my children's CTFs in F&C. I do add to the funds, and so are able to spread the money between funds. I use:
F&C Investment Trust
F&C British Assets Trust
F&C Global Smaller Companies
F&C Commercial Property

Without pushing this forum's boundaries on giving financial advice too far, I would say:

• All of the F&C funds are significantly more risky than a cash CTF, and long-term, should do better than cash. However, with any share investment, there is a risk that they will do worse than cash. Given that the expected return is higher than cash for all of the funds, you should focus on reducing the risk and the expenses.
• F&C Investment Trust is very widely diversified and has the lowest expenses of the F&C funds, both attributes generally correlated with lower risk, and would be my choice if I only had one F&C fund.
• Most of the funds you mention are probably riskier than FCIT, and may do better, but are likely to be more volatile as well.

Note all the italicised caveats - there are no guarantees with any of this.

mrsdumplin

Thanks you
I completely understand about the advice thingy...

I just have no idea how to start comparing funds...with one company let alone start comparing between investment companies!

We intend to set up funds that we control that she doesnt automaticly get her mits on when she turns 18, I'm hoping she'll grow up to have a sensible head but if shes anything like her Mum then if it lasts 24hrs she'd be doing well. So we are treating this voucher very much as bonus money and feel we can be as risky as we like, we are also going to invest at some point £250 in to a account that would give the equivilent return as a cash CTF or as close as we can get so if our decision turns out to be foolish ie we lose the lot... we will still be able to give her something...

Thanks again
MrsD

wriggly

So it's OK if the £250 ends up being £0, as long as you lose it, not her?

You don't need to compare much. As I said, start with:

diversification - how many different assets does the fund own, and to what extent is one asset likely to go up when another goes down?

expenses - how much does the fund manager take from you? Expenses are usually expressed as a TER, but you can also compare the projections in the prospectus which say something like: If you earn 7%, the expenses will mean you're effectively left with 5.4%

cloud_dog

mrsdumplin wrote: »

I just have no idea how to start comparing funds...with one company let alone start comparing between investment companies!

Try TrustNet.

You can filter it by area, sector, manager, etc.

Jake'sGran

cloud_dog wrote: »

Try TrustNet.

You can filter it by area, sector, manager, etc.

I use Trustnet all the time. They list the best fund managers and also the position of the best funds in any particular field e.g. Income, Special Situations, Specialist and so on. It is really a good place for fund information. I saved money for my grandsons for a long time and used fixed rate savings and an old and well regarded investment trust (Alliance). Now, the first g/son has his first car and is at Uni but it looks like he will take after his Mum whereas the other one is cautious and likes having a good bank balance. They are 19 and 17 and doing really well.

murpheus

Hi mrsdumplin.

As a result of MSE, I decided to put both my child's CTF cheques into F&C, based on the low handling fees.

I did Graphite Enterprise Trust for my daughter (now almost 6) and Pacific Assets Trust for my son, almost 3. They've both been great but sadly Pacific Assets trust will no longer be available (as of 1st July) and account holders are expected to receive a letter informing them of their options soon.

My intention will be to keep Graphite and to put the paid-up value of my son's Pacific Assets Trust (currently more than £1,200) straight into F&C US Smaller Companies, which has done really well in recent years. I have an appetite for excitement and risk, and let's face it - when the world panics and share prices fall (THAT IS THE TIME TO BUY A SHED-LOAD) - get in cheap and watch it grow.

18 years is a long time and shares almost ALWAYS outperform standard interest savings over the long term.

Good luck picking the fund but to be honest, you've started well in any case by picking the right company to manage it in the first place.

murpheus

Thrugelmir

Personally I would use the grandfather trust Foreign & Colonial for an initial investment to put in the drawer for the future. A fund with diversification that requires little supervision. Not the top performer but consistant.

Graphite's share price swings wildly. So is better as part of a larger portfolio if exposure to private equity is desired.

British Assets hasn't performed as well as Foreign & Colonial over the long term.

Managed trades at a premium to NAV and carries in effect double charging. As its underlying investments are in other investments trusts including F&C's own.

The others you mention are specialist in that they invest in very defined areas. So better as part of a wider portfolio.