Should I put £100,000 in a L&G Tracker Fund

DavidHayton

celiam wrote: »

I have no mortgage and no ISAs. Good news I have £100,000 to invest. I am 55 yr old, self-employed with variable income. Someone recommended a L&G Tracker Fund. Is this a good idea?

Hi Celiam,
I think that you should be cautious about going down the DIY route. This is fine if you know what you're doing, but like any other form of DIY, it could cost you in the long run. An Independent Financial Advisor would be able to put together a balanced portfolio for you that would match your objectives and attitude to risk.
For example, they may recommend an actively managed fund rather than a tracker because the actively managed fund is lower risk: trackers can be riskier because in order to track an index, a large proportion of your money can end up being invested in a few companies. For example money in the L&G 100 index fund, 24% of your money will be invested in just 4 companies. Also a third of the total is in oil, gas and mining. Now you may want this, but you may not ... and trackers don't allow you to choose.

See: http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal--and--general-uk-100-index-class-r-accumulation

Best wishes, David

Jonbvn

DiggerUK wrote: »

Have some fun with Premium Bonds, no guarantee what you will get, but they are safe and instant access.

Sorry but PB's are rubbish and best avoided.

bendix

sabretoothtigger wrote: »

Ive heard worse

I haven't. It's an appalling idea.

Surely the fact the OP is obviously relatively unsophisticated at investments (evidenced by the fact he's asking for advice on MSE) suggests it's a terrible idea to lump a decent sum in one go in one asset class and one fund, particularly the markets at 24 month highs.

What are you thinking of sabretoothtiger? Normally you're much more savvy than this.

Flyboy152

There are some weird and wild ideas on this thread.

Flyboy152

Jonbvn wrote: »

Sorry but PB's are rubbish and best avoided.

Why????

.........

Aegis

Flyboy152 wrote: »

Why????

.........

Expected returns are very unimpressive, and if you use the median rather than the mean to exclude the effect of the very unlikely prizes, you see an even lower probable return on your holdings.

In short, you can get better in cash accounts, even with tax. You can also get better odds of winning big by using some of your interest on the cash holdings to buy an occasional lottery ticket.

p00hsticks

bendix wrote: »

I haven't. It's an appalling idea.

£100,000 on the 100-1 outsider in the 3.30 at Kempton Park, perhaps ?

Flyboy152

Aegis wrote: »

Expected returns are very unimpressive, and if you use the median rather than the mean to exclude the effect of the very unlikely prizes, you see an even lower probable return on your holdings.

In short, you can get better in cash accounts, even with tax. You can also get better odds of winning big by using some of your interest on the cash holdings to buy an occasional lottery ticket.

I have a reasonable sum invested in premium bonds. I get on average three and a half per cent return, tax free (equivalent to five point eight gross). With the chance of winning the big one. If I get fed up with it, I can always get my money back. With interest rates at an historic low, I am not doing too badly. It is all part of a diverse and balanced investment portfolio. I think most people see a similar return.

Aegis

Flyboy152 wrote: »

I have a reasonable sum invested in premium bonds. I get on average three and a half per cent return, tax free (equivalent to five point eight gross). With the chance of winning the big one. If I get fed up with it, I can always get my money back. With interest rates at an historic low, I am not doing too badly. It is all part of a diverse and balanced investment portfolio. I think most people see a similar return.

No, they don't. According to the premium bond calculator elsewhere on this site, you are in the top 1.48% of bond holders with a return that high.

Flyboy152

Aegis wrote: »

No, they don't. According to the premium bond calculator elsewhere on this site, you are in the top 1.48% of bond holders with a return that high.

You mean this?

http://www.moneysavingexpert.com/savings/premium-bonds-calculator/#result

With probabilities, there is always a slight fluffing as it's all about chance, as for every person carrying a four leaf clover, another has crossed a black cat while walking under a ladder. Yet if you take it as read that some will of course win a million, these results are very reflective of the reality for most Premium Bond holders

Not really 1.48% is it.