£300 per month investment ideas

Ark_Welder

Meeper wrote: »

Investment Trusts are generally not advised upon by many FA's, primarily due to their lack of commissions paid to the FA community. There has been some controversy in the past, particularly around split-capital investment trusts which were touted as being "safe" but were in fact anything but!

And a good deal of compensation was paid due to investors having been given bad advice from financial advisors.

Meeper wrote: »

More open-ended options such as Unit Trusts or OEICs are preferred, as the managers of such funds can create additional units and shares on demand depending on the requirements, and can have a more flexible mandate in order to react to market conditions more appropriately.

Discount control mechanisms on many investment trusts are also able to issue new shares depending upon demand.

How would you see the manager of an OEIC having more flexibility than an IT when there is a surfiet of sellers? The OEIC might need to sell investments to meet redemptions whereas on IT would not.

Meeper wrote: »

In addition, by investing in an OEIC in the same company which holds your ISAs, the OEIC funds can "bed and breakfast" over into your ISA each tax year, automatically utilising your annual ISA allowance and ensuring the most is mad of your tax-free exemptions.

If this is being done on a yearly basis then the same can be said of ITs and individual shares.

atush

gadgetmind wrote: »

Light on cash and bonds IMO.

I agree they are light on cash savings with just one persons allowance cash isa for one year. Need more liquid asssets really.

moneylover

Meeper wrote: »

In addition, by investing in an OEIC in the same company which holds your ISAs, the OEIC funds can "bed and breakfast" over into your ISA each tax year, automatically utilising your annual ISA allowance and ensuring the most is mad of your tax-free exemptions.

Can you explain this paragraph - do you mean that at the beginning of a tax year you can move the appropriate amount of a fund or shares you hold up to the tax limits from the non ISA part of your account into the ISA part, without any charge and without selling and re-buying the fund

If so, can you do this with H-L?

Meeper

Correct definition, and I would imagine Hargreaves Lansdown provide exactly such a service. Whether they charge for it or not is for you to find out.

BLB53

If you are interested in looking at inv. trusts, there is a good article today on the iii website which you may find helpful.
I think it would be worthwhile to seriously consider individual shares and/or ITs. You can easily build up a good blue chip portfolio and get a yield of around 5% and if you drip in your £300pm you will get the benefit of pound cost averaging.
I think you may find it more expensive with HL but iii have 'portfolio builder' which allows you to buy individual shares and ITs for only £1.50 per trade.
If you only have a cash isa you can both open a stocks and shares isa and invest the same again.
Obviously DYOR as they say.
Good luck

BLB

Ark_Welder

moneylover wrote: »

Can you explain this paragraph - do you mean that at the beginning of a tax year you can move the appropriate amount of a fund or shares you hold up to the tax limits from the non ISA part of your account into the ISA part, without any charge and without selling and re-buying the fund

If so, can you do this with H-L?

Shares and/or units have to be sold and repurchased inside the ISA, so there may be transaction costs and price movements to consider, [edit] and possibly CGT too.

http://www.hl.co.uk/shares/bed--and--isa-sipp

jamesd

It is mandatory for the investments to be sold outside the ISA and the cash transferred into the ISA to repurchase the investments. Hargreaves Lansdown offers such a service.

If the sale and repurchase are done on the same day for an OEIC or for a unit trust with no commission there may be little difference in price, possibly only some dilution levy, which might be zero. So the visible effect might be a simple transfer without sale and repurchase, even though that is not what actually happens.

There is one general type of exception, some workplace share schemes, where the investments can be put directly into the ISA without a sale first.

The specific rules governing a bed and ISA transaction are at 6.14 in the Guidance Notes for ISA Managers, which in part says:

"6.14 The ISA subscription can be used to buy back the same investments within the ISA provided certain conditions are met. This is a ‘Share Exchange’ (sometimes called ‘Bed and ISAing’).

The conditions that must be satisfied are as that:

(a) The investments must not be purchased from the investor’s spouse, civil partner or from the investor.
(b) The investments must be bought at the open market price (paragraph 10.7). ..."

gadgetmind

jamesd wrote: »

It is mandatory for the investments to be sold outside the ISA and the cash transferred into the ISA to repurchase the investments. Hargreaves Lansdown offers such a service.

HL also waive the dealing fees for "Bed and ISA" so your only cost is the bid/offer spread. Some tell me that their broker can even avoid this with (from memory!) "matched trades" but I haven't asked HL.

jamesd

Yes, some can/ Brokers are allowed to fulfill orders by matching sells of one customer with buys of another customer, including within a S&S ISA. Should be covered in their best execution policy statement.

gadgetmind

Meeper wrote: »

Investment Trusts are generally not advised upon by many FA's, primarily due to their lack of commissions paid to the FA community.

Well, well.