best investment fund?

shanti

Hi there
I am looking to invest around £500 per month over the next few years and was wondering if anyone could recommend something with the best returns. I am quite interested in shares but is all seems a bit complicated and I dont really have the time to research companies etc. I also thought of a unit trust or a fund where I can put in money and shares are bought on my behalf. Sorry to sound a bit un-savvy about all this but it is a new area for me. Hope you can help. Thanks!

dunstonh

Single fund investing is the old fashioned way of investing and will result in lower returns.

£500 allows 10 funds and you should go for 10.

If you dont have time to research, then its worth paying for someone that does. Otherwise you arent going to know if the risk profile of the investment matches you and the funds are suitable for your needs.

Also, it is againt board rules to recommend investment funds on the forum (and it isnt feasable to comply with FSA rules on disclosure in forum posts).

EdInvestor

You can check out the best funds in different categories here:

https://www.citywire.co.uk/Funds/Home.aspx

Go for funds that have been in the top 10 for their sector over 1,3,5 and 10 years, that way you should be able to locate consistent performers.

Always use a discount broker which rebates charges, don't go direct to the fund management company.

Some discount broker sites such as

https://www.h-l.co.uk
and
https://www.chelseafs.co.uk

contain useful info about things like risk ratings as well.

cheerfulcat

shanti wrote:

Hi there
I am looking to invest around £500 per month over the next few years and was wondering if anyone could recommend something with the best returns.

Hi, shanti,

That's an excellent amount to be investing and you are to be congratulated on your plan. Unfortunately no-one can predict exactly where the best returns will be, and where they have been, while known, is not necessarily an indicator of future direction - although I think that it is not too controversial to say that anything which has done very well over the last three or four years is unlikely to continue that outperformance, while anything which has languished a bit may be worth a look...

I am quite interested in shares but is all seems a bit complicated and I dont really have the time to research companies etc. I also thought of a unit trust or a fund where I can put in money and shares are bought on my behalf.

To be honest, if you have no time to research investments you probably need someone to help you to choose. Bear in mind that it takes almost as much research to pick a fund as it does to pick a share.

An alternative to unit trusts is investment trusts; the global ones tend to have portfolios covering many asset classes and sectors, so a selection of them should cover most angles, which is really the best you can hope for with limited time for research. You can read more about ITs on the AIC website, here, and at Incademy.

shanti

Thank you!

dunstonh

Do not rely on the citywire top 10 tables. All that shows you is that xyz fund was in the top 10 in that particular period. The league table it is includes funds which are different in risk profile and aims. A fund with a more adventurous risk profile would be more likely to make the top 10 and the bottom 10 in different periods. Whereas a more stable fund may never make the top 10 but be more consistent over the long term.

Past performance is no indication of future returns.

jamesd

I tend to favor Trustnet because you can customise it to show you the RiskGrade and discrete year performance.

Not that that's enough. Same funds, 1 year sort. The Standard Life UK Smaller Companies R fund looks interesting. Then you compare it to the second ranked Old Mutual UK Select Small Companies. The discrete performance in the summary really tells the tale but the charts for the individual funds make it more obvious: the Standard Life fund had a good 2006 but the Old Mutual one consistently did well over the years.