Critique my selection of funds - please!

mr_fishbulb

DIY_Income_Investor wrote: »

It has been discussed pretty widely that the initial costs and annual charges (plus the internal 'churn' costs) take a large proportion of your potential gains

Widely discussed, but not agreed.

Index trackers are all well and good for mature, established indexes, but if you are looking at something more specialist or emerging then it can help having a fund manager who knows the market.

DIY_Income_Investor wrote: »

You are also exposing yourself to lots of currency risk (when presumably you want ££s in the end?).

A better approach IMHO is to take a simpler, more proactive DIY approach to your investments, centred on ETFs (if you are new) and then FTSE 100 dividend shares, UK gilts and UK corporate bonds.

Tracking a foreign index with an ETF isn't going to eliminate currency risk. Although the ETF is priced in £s, the underlying index isn't. So you will still be affected by currency risk.

Also are Gilts and bonds the areas you want to be in when there is is high inflation about?

B_Blank

DIY_Income_Investor wrote: »

Umm...why are you even investing in funds? It has been discussed pretty widely that the initial costs and annual charges (plus the internal 'churn' costs) take a large proportion of your potential gains - and the vast majority of the funds don't beat the simple indexes. You are also exposing yourself to lots of currency risk (when presumably you want ££s in the end?).

A better approach IMHO is to take a simpler, more proactive DIY approach to your investments, centred on ETFs (if you are new) and then FTSE 100 dividend shares, UK gilts and UK corporate bonds.

Most funds have a 0% initial charge if you use the right brokers.

B_Blank

nzseries1 wrote: »

Care to elaborate? Inflation isn't something I know very much about. What sort of funds would you go for if you were worried about inflation?

Well nobody knows what is going to happen, but small companies are more likely to struggle with inflation as far as I know. If you have a bit of money to invest you should subscribe to the ft online maybe, they often have good tips on what people are doing with their personal finance.

I am not an expert, but you should probably do some reading to protect yourself from possible high inflation if you are investing money which is important to you.

jimjames

DIY_Income_Investor wrote: »

A better approach IMHO is to take a simpler, more proactive DIY approach to your investments, centred on ETFs (if you are new) and then FTSE 100 dividend shares, UK gilts and UK corporate bonds.

I'd say an ETF is exactly the wrong thing to invest in if you are a new investor. I've been investing for over 15 years and have still not seen the need to buy any ETFs.

@OP, if those are your only funds then yes it is a very high risk portfolio. You may be better off having a more balanced mix of funds to avoid getting burnt as many investors did when they piled into tech funds in 2000.

psychic_teabag

This article looks at tracker funds vs ETF's.
http://monevator.com/2010/11/16/etfs-vs-index-funds-differences/

The author comes down in favour of funds.

mr_fishbulb

psychic_teabag wrote: »

This article looks at tracker funds vs ETF's.
http://monevator.com/2010/11/16/etfs-vs-index-funds-differences/

The author comes down in favour of funds.

I guess that settles it once and for all

nzseries1

Thanks all - I tried to invest in individual shares but the thought of it was just too scary. So I thought I'd go with funds even if the fees do eat up some of the potential gains. I only paid 1% initial charge on the funds so I don't think that's too bad (even though I know there are 0% ones out there).

More than 70% of my savings are in bog-standard savings accounts so despite there being risk there it's only money I'd be prepared to lose. Thanks all for your input.