Maxed out ISA, but still want to invest...

DonC

Hi guys,

I cant invest anymore in my ISA, but would like to invest in on of HL's new funds. I intend to buy this fund and hold it long term.

Should I start up a SIPP, or should I just buy the fund and move it into an ISA in April?

Thanks for your help.

Aegis

If you're looking to buy and hold in order to sell and spend all the proceeds at some point, then buy direct. If you're looking to save for your retirement, a pension might be appropriate, however bear in mind that you will get no rebate of the annual charges on the HL SIPP, therefore you might be better off going to a provider with a more limited range of funds but significantly lower costs.

dunstonh

You could just buy the funds unwrapped or use a different tax wrapper (such as life assurance if that was applicable). If you buy them unwrapped then you can bed&ISA them next tax year if you want. No point using the pension wrapper unless the tax and maturity method suits your requirements.

DonC

Thanks for the replies guys.

Aegis wrote: »

If you're looking to buy and hold in order to sell and spend all the proceeds at some point, then buy direct. If you're looking to save for your retirement, a pension might be appropriate, however bear in mind that you will get no rebate of the annual charges on the HL SIPP, therefore you might be better off going to a provider with a more limited range of funds but significantly lower costs.

I have no plans to sell down the line. Id probably take a look from time to time, but for the most part Id "forget" about them.

HL say they're waiving the 4.25% initial charge, although there will be a 1.75% annual charge. HL is also stating this is an exclusive offer.

dunstonh wrote: »

You could just buy the funds unwrapped or use a different tax wrapper (such as life assurance if that was applicable). If you buy them unwrapped then you can bed&ISA them next tax year if you want. No point using the pension wrapper unless the tax and maturity method suits your requirements.

Buying them unwrapped sounds the best option.
Im just a bit nervous of any unknown implications.
Any idea whether moving them into an ISA wrapper in April will incur a charge?

Thanks again.

Aegis

DonC wrote: »

I have no plans to sell down the line. Id probably take a look from time to time, but for the most part Id "forget" about them.

HL say they're waiving the 4.25% initial charge, although there will be a 1.75% annual charge. HL is also stating this is an exclusive offer.

HL like to run their marketing campaigns like this. Basically they're trying to drum up support for this fund by advertising it as an exclusive discount for people taking up the initial offering. However, if you look at pretty much every established fund offered by HL, you'll see that they have the exact same deals attached (i.e. initial charge fully or mostly wiped out, plus some discounts on the annual charge for direct or ISA holdings).

They're not offering you anything special, they just like to make you think they are.

Only invest into their new funds if you have your own independent reasons for doing so. Otherwise find established funds that you like and look them up: you'll see much the same deals.

Newbie2saving

DonC wrote: »

HL say they're waiving the 4.25% initial charge, although there will be a 1.75% annual charge. HL is also stating this is an exclusive offer.

H-L wave most initial charges for funds (or the majority of it) so don't let that sway you. Also you need to look at the TER, which encompasses all the costs of the fund. If it is the Latin American fund it is 1.9% you need to take into account.

H-L seem to be fabulous at marketing, make sure you're happy with everything about the fund, have you compared other funds in the same sector to see if there isn't already a fund / manager with experience? I'm a newish investor and asked a question re H-L's new funds recently https://forums.moneysavingexpert.com/discussion/3004214 and got lots of advice from MSE'ers, made me re-think / reassure my strategy.

Good luck.

Loughton_Monkey

I would suggest you have a rather unique and 'interesting' strategy.

In general terms, a fund is a fund. HL charges are HL charges. And nothing wrong with HL.

But here's what I find 'interesting'.

1. To invest in a single fund with the intention of holding it very long term, with just the occasional 'look'? Really? Up to you. There are so-called 'Lazy Investor' funds which could be suggested for this purpose, but if it is not that sort of fund then you have a peculiar strategy.

2. To most people, investing in a fund 'long term' woud scream put it in a pension not least because of the tax relief. OK, there are specific rules about taking it, but a pension is considered a very powerful vehicle for long term investing.

3. Maybe having it outside a tax free ISA is also a curious arrangement. Although there are annual limits. This would imply one of two things. Either you 'drip feed' it into your ISA, or if there are any reasons why you wish to want to avoid this, then at the very least you would be advised to avoid CGT by ensuring that you sell for three months every now and again to ensure that you 'realise' gains £10,100 at a time.

If you have considered all this, then fine. Otherwise, may I suggest 'back to the drawing board'?

DonC

Newbie2saving wrote: »

H-L wave most initial charges for funds (or the majority of it) so don't let that sway you. Also you need to look at the TER, which encompasses all the costs of the fund. If it is the Latin American fund it is 1.9% you need to take into account.

H-L seem to be fabulous at marketing, make sure you're happy with everything about the fund, have you compared other funds in the same sector to see if there isn't already a fund / manager with experience? I'm a newish investor and asked a question re H-L's new funds recently https://forums.moneysavingexpert.com/discussion/3004214 and got lots of advice from MSE'ers, made me re-think / reassure my strategy.

Good luck.

Thanks for the link, that was an interesting read.

As you mentioned, I was looking at HL's new latin America fund, I found it appealing as Im heavily invested ( percentage wise) in UK shares \ funds.

Like you, I think I'll keep looking.

DonC

Loughton_Monkey wrote: »

I would suggest you have a rather unique and 'interesting' strategy.

In general terms, a fund is a fund. HL charges are HL charges. And nothing wrong with HL.

But here's what I find 'interesting'.

1. To invest in a single fund with the intention of holding it very long term, with just the occasional 'look'? Really? Up to you. There are so-called 'Lazy Investor' funds which could be suggested for this purpose, but if it is not that sort of fund then you have a peculiar strategy.

2. To most people, investing in a fund 'long term' woud scream put it in a pension not least because of the tax relief. OK, there are specific rules about taking it, but a pension is considered a very powerful vehicle for long term investing.

3. Maybe having it outside a tax free ISA is also a curious arrangement. Although there are annual limits. This would imply one of two things. Either you 'drip feed' it into your ISA, or if there are any reasons why you wish to want to avoid this, then at the very least you would be advised to avoid CGT by ensuring that you sell for three months every now and again to ensure that you 'realise' gains £10,100 at a time.

If you have considered all this, then fine. Otherwise, may I suggest 'back to the drawing board'?

Loughton_Monkey wrote: »

I would suggest you have a rather unique and 'interesting' strategy.

Id suggest you've got a rather unique way of responding to newbies asking for help.

Loughton_Monkey wrote: »

In general terms, a fund is a fund. HL charges are HL charges. And nothing wrong with HL.

But here's what I find 'interesting'.

1. To invest in a single fund with the intention of holding it very long term, with just the occasional 'look'? Really? Up to you. There are so-called 'Lazy Investor' funds which could be suggested for this purpose, but if it is not that sort of fund then you have a peculiar strategy.

I currently have a couple funds \ shares all wrapped in my ISA, thats why its maxed out. I was asking advice on getting more.
I do of course keep an eye on the funds \ shares that I own, but due to my current level of knowledge, I would prefer to keep funds and shares long term. I really dont see the point of paying exit fees at the first hint of a dip.

Unfortunately I dont have a strategy as such, Im very much trying to learn at this point. My general strategy is find something interesting, read up on it and post questions on forums like these.

Loughton_Monkey wrote: »

2. To most people, investing in a fund 'long term' woud scream put it in a pension not least because of the tax relief. OK, there are specific rules about taking it, but a pension is considered a very powerful vehicle for long term investing.

To my limited knowledge a SIPP is a pension, which is one of the options I mentioned in my initial post.
While Id have no problems with a pension, I would prefer an ISA if possible.

Loughton_Monkey wrote: »

3. Maybe having it outside a tax free ISA is also a curious arrangement. Although there are annual limits. This would imply one of two things. Either you 'drip feed' it into your ISA, or if there are any reasons why you wish to want to avoid this, then at the very least you would be advised to avoid CGT by ensuring that you sell for three months every now and again to ensure that you 'realise' gains £10,100 at a time.

If you have considered all this, then fine. Otherwise, may I suggest 'back to the drawing board'?

As I said in my initial post, I would have bought the fund and then moved it into my ISA in April.
This seems to be the option that dunstonh is suggesting I opt for.


I've noticed your other posts on the forum and I appreciate your input.
Maybe Im being overly sensitive, (and if so I apologise), but in this case, the tone of your post could have used a little work.

Linton

DonC wrote: »

Hi guys,

I cant invest anymore in my ISA, but would like to invest in on of HL's new funds. I intend to buy this fund and hold it long term.

Should I start up a SIPP, or should I just buy the fund and move it into an ISA in April?

Thanks for your help.

ISTM that to invest possibly £1000s in a high risk fund with no track record because you save 3% initial charge seems bizarre. You could easily lose or gain 3% in a week or less. One Lat Am fund I looked at has dropped 10% since the new year.

Your investment choices are up to you but I would strongly suggest to any newbies reading the thread that they focus on putting together a broadly based portfolio before they consider this type of fund.




As to whether to ISA it - I suggest you wait until April. I dont believe you can move funds into an ISA, you would need to sell outside the ISA and buy inside. The costs of doing that could exceed any gain by going for special offers.

C_Mababejive

Dont want to be seen as hijacking the discussion as my query is similar and rather than start a new one,it might be of value to keep it all here.

Now then,i keep reading about SIPPS to the point where i almost feel i should give it some consideration!

If someone has a good FSPS,would a SIPP be likely to add much value?


Could you ,for eg;

Hold just cash in the SIPP in order to get the tax free advantages and also HM governments contribution?

Could you convert a HL fund ISA into a SIPP?

I note that SIPP rules allow you to take 25% of the value as a lump sum and the rest as taxable income....

What happens if you die before all your pot is used up ?

Why is the income taxable?

Ta