Help picking funds

Chrismaths

A regular investment in Alliance Trust costs £2.50 and no commission.

That's only one IT! If you want to buy the Alliance trust that's fine, but if you want something other than a one-size-fits-all, fire-and-forget then you are going to have to buy something else as well. That will cost £7.50 + 0.2%.

Are you seriously suggesting that someone with £1000 invested would take an income from it? In any case, the charge for an automatic withdrawal is £1, not £2.50.

Sorry CC, but this says different. Automated payments means inter-alliance trust account transfers. It's £2.50 for income.

It's possible some people would take the income. Some people just like seeing it come into their account. I agree, the majority wouldn't take the income per se, but the more important point was that if you needed access to your money, it would cost you £10 per withdrawal, plus a £15 dealing fee if you needed to sell (as you would in all likelihood)+0.2% commission - even on alliance trust. That's like having a 2.7% MVA on a grand...

You said that ITs were more suitable than Open ended collectives for small amounts, that's all I was picking up on.

cheerfulcat

Chrismaths wrote:

That's only one IT! If you want to buy the Alliance trust that's fine, but if you want something other than a one-size-fits-all, fire-and-forget then you are going to have to buy something else as well. That will cost £7.50 + 0.2%.

If you want more investments and a cheap ISA then you open a Motley Fool ISA and buy at £1.50. In any case, it was exactly one-size-fits-all, fire and forget which I was suggesting for the OP as s/he seemed to be getting far too complicated...

Sorry CC, but this says different. Automated payments means inter-alliance trust account transfers. It's £2.50 for income.

It's ridiculous quibbling over £1.50 but...the inter account transfer is from the investment account to the related deposit account. To withdraw a regular amount you transfer from one to the other at a cost of £1. Not £2.50 ( confirmed with AT, FWIW ).

You said that ITs were more suitable than Open ended collectives for small amounts, that's all I was picking up on.

Small regular payments, not small amounts of total investment; one would hope that over time these would add up to a fairly substantial investment.

Chrismaths

Like you say, not worth quibbling. I think we can agree to amicably disagee on this one?

si1503

Jake'sGran wrote:

Hi Sillychuckle - I have not read all the other responses but wanted to ask why you want four funds.

To diversify his portfolio against unsystematic risk.

I think I would have just two. If you invest via Hargreaves Lansdown there may be no or a very small initial charge plus an annual charge but it would still be times 4 which I would not think is very efficient.

The HL charges are a % of the initial investment, 0.25 on 2 x 2000 is exactly the same as 0.25 on 4 x 1000. So selecting more funds will not result in any additional loss on the total figure of capital invested.

Ian_W

This is a very interesting thread and I've certainly learned an aweful lot about Investment Trusts [mean that most sincerely folks ] but back to the OP's last posting.

Sillychuckie wrote:

AEGON STERLING CORPORATE BOND 'A' (£950) (Corp Bond - Accum units)
ARTEMIS HIGH INCOME (£1000) (UK Other Bond - Income (divs))
JUPITER INCOME (£950) (UK Eq & Bd Income - Accum units)
INVESCO Perpetual Income (£400) (Equity Income - Accum units)
Schroder European Alpha Plus (£400) (Equity Income - Accum units)
Neptune Global Equity Fund A (£300) (Equity Income - Accum units)

Comments please. Do you think that I am closer to the mark?

I agree with Liz the Whiz for the reasons she outlined that you're OD-ing on Bonds and that if they have a bad year your equity funds will have to do extremely well to compensate. I think your desire for "safety" may risk having the opposite affect.

Wasn't going to comment with such knowledgeable investors as cc, ed and carnet about and the highly professional opinions of Chris and d/h being chipped in but your general risk and attitude are similar to mine and I'm also in the novice category. One big difference is I'm 30yrs older so your long term may well be much further in the future than mine. I've recently done mine & Mrs W's mini ISAs for £8K and I thought mine was fairly cautious but, in comparison, it looks very cavalier and adventurous! :eek:

I'd stick to 4 funds at this stage - reason: you can get another 4 in April, perhaps by regular contributions to balance up more - and you've got a good start with Invesco Income & Schroders for pure equity and Artemis high Income for Bond and Equity. The fourth one I'd add is a cautious managed one which also contain bonds often on a 40/60 split with equities. I don't know what the pros and experienced think of them but researching them last year MANY of them seem to do what they say on the tin, with the the top half or more on Trustnet being <10% down in the crash compared with 20-30% even for "safe" equity funds like Mr. Woodford's.

If you want to balance them more towards safety then limit the 2 pure equity funds to £750 or so initially and add this to the ones with bonds. If you stick that through bestinvests portfolio tool and are prepared to accept a 10% loss I think you'll find it comes out 7 for allocation, 6 for geography and 9 or 10 for capitalisation. With £4K you're not going to get it spot on I don't think.

HTH - you are taking a risk with S&Shares but do remember you never make a loss or gain until you sell so even when a crash comes, as it will, you only lose if you don't wait it out.

EdInvestor

unsystematic risk.

I think I prefer the systematic type myself

Re the OP's choice, I'll say it again: IMHO a commercial property fund (or two) will be a better low risk choice than a bond fund in the currrent climate.

Sillychuckie

OK, thanks again all.
Looks like I'm still being a tad over cautious. Might get rid of the corp bond and put more into the remainder (and perhaps a property one as you suggested).
Far too busy during the week to go for an 'attempt 4'... but might get a chance over the coming week end. Watch this space.
TY for all the points and opinions. I guess there isnt really any right or wrong answer without retrospect.
Just feel like I should be using my allowance and want to try and do as well as cash savings. Still, nothing is ever that simple.
Have a good week all.

Sillychuckie

OK. Can't wait all week. The prospect of losing all my money is just far too exciting

- UK Other Bond:
ARTEMIS HIGH INCOME (£1250)
- UK EQ and BD Income:
JUPITER INCOME (£1100)
- Equity Income:
INVESCO Perpetual Income (£500)
Schroder European Alpha Plus (£500)
- Cautions Managed
Gartmore Cautious Managed Acc (£650)

I'll get in early next april also and buy a global bond and something that invests in property to help stablise things (only a few months away.. and I probably wont buy this lot until end of Feb anyway).

Later on in the year, depending on how things are going, I'll probably drip feed a special sit fund.

Comments are as always, very welcome. But I'm feeling abit more confident about this choice than my previous.
No doubt you'll all tell me how mad I am.
Night all. Shall check responses tomorrow eve.

si1503

EdInvestor wrote:

I think I prefer the systematic type myself

The 2 are very different you know. You can not diversify against systematic risk, that is the risk of the whole economy underperforming as a whole, for example due to an economic crisis of some sort.

si1503

Sillychuckie wrote:

OK. Can't wait all week. The prospect of losing all my money is just far too exciting

- UK Other Bond:
ARTEMIS HIGH INCOME (£1250)
- UK EQ and BD Income:
JUPITER INCOME (£1100)
- Equity Income:
INVESCO Perpetual Income (£500)
Schroder European Alpha Plus (£500)
- Cautions Managed
Gartmore Cautious Managed Acc (£650)

I'll get in early next april also and buy a global bond and something that invests in property to help stablise things (only a few months away.. and I probably wont buy this lot until end of Feb anyway).

Later on in the year, depending on how things are going, I'll probably drip feed a special sit fund.

Comments are as always, very welcome. But I'm feeling abit more confident about this choice than my previous.
No doubt you'll all tell me how mad I am.
Night all. Shall check responses tomorrow eve.

Why not just invest in 1k into 4 funds. Keep it simple. Personally I don't see the need for both the Invesco and Jupiter EIFs, if you believe in portfolio theory then you will only invest in the investments with the best returns for a given level of risk, in terms of those 2 funds the risk level is very similar, I'd opt for the one that you consider to be the better of the 2, based on holdings and management and your views on where the economy is heading. Personally I like the invesco high income, its the creme de la creme of EIFs IMO as has held its value well through downturns as well as performing well in bull periods.

I'd also add in a property holding to lower the risk of the portfolio slightly, perhaps instead of the gartmore. The NU property fund is a consistant performer and invests in bricks and mortar, Std life select also looks promising however it invests in shares as opposed to bricks and mortar, so it is riskier, but still, by investing in one of these funds you will be giving your portfolio exposure to an area you are not already invested in. Next time you look to top things up is when perhaps you can look at a UK smaller cos fund, or global markets along with a bond investment perhaps to offset the risk.

Good luck with whatever you decide on.