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Fidelity maxi ISA Performance
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Sulumar
Posts: 56 Forumite
Hi
I have had maxi ISAs with Fidelity for the the last two years (started on the recommendation of my IFA) and have put the max amount in both times through a mixture of lump sums and monthly deposits. My question is about the performance which seems pretty poor; though I haven't lost any money, I'm pretty sure that my bog standard savings account would have done better even given the dripfeed of savings into them.
It's my first dabble in stocks and shares and although I appreciate that 1)there is the risk of value increasing or decreasing, 2) ISAs are a long term savings vehicle and, no doubt 3) my IFA has taken some commission, I'm not confident about understanding their performance details to see if this is reasonable given the current market and how this reflects upon my ISA.
Can anybody comment please on whether my Fidelity funds have had a poor year to explain the apparent poor performance. The money is saved in MoneyBuilder Balanced Fund and MoneyBuilder Income Fund.
Thank you for any opinions; it will help me choose whether to do the same this year or to go for separate cash and S&S mini ISAs.
I have had maxi ISAs with Fidelity for the the last two years (started on the recommendation of my IFA) and have put the max amount in both times through a mixture of lump sums and monthly deposits. My question is about the performance which seems pretty poor; though I haven't lost any money, I'm pretty sure that my bog standard savings account would have done better even given the dripfeed of savings into them.
It's my first dabble in stocks and shares and although I appreciate that 1)there is the risk of value increasing or decreasing, 2) ISAs are a long term savings vehicle and, no doubt 3) my IFA has taken some commission, I'm not confident about understanding their performance details to see if this is reasonable given the current market and how this reflects upon my ISA.
Can anybody comment please on whether my Fidelity funds have had a poor year to explain the apparent poor performance. The money is saved in MoneyBuilder Balanced Fund and MoneyBuilder Income Fund.
Thank you for any opinions; it will help me choose whether to do the same this year or to go for separate cash and S&S mini ISAs.
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Comments
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Fidelity Moneybuilder income is a good fund. Its had top half sector performance in most of the years since launch. Its A UK corporate bond fund so you should never expect much in the way of performance.
Fidelity Moneybuilder Balanced is not a constant performer but not one you would call poor. Its in the UK equity & bond sector and performance in general is not far off the pace normally but last year wasnt that good.It's my first dabble in stocks and shares
You arent dabbling in stocks and shares on the whole. The corporate bond fund has no stocks and shares and the other only has around 70% exposure.1)there is the risk of value increasing or decreasing
Not by much either way with these sectors.
No doubt you told the adviser you were low risk and that is what you have been given. The funds are also low cost so perhaps your discussions covered charges at some point and you indicated you wanted low cost? Often you get what you pay for.3) my IFA has taken some commission
No he hasnt. These funds do not pay any intial commission.
You have only been invested for two years and the last year hasnt been that good for fixed interest. Maybe you should consider your asset allocation and whether you are invested under your risk profile. You may also want to discuss this more with the adviser. After all, he/she knows more about you than we do.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Thank you very much for your reply. You seem to be the acknowledged resident expert around here.
As you quickly surmised, I am risk averse and perhaps I could/should be less so with a time frame of 20 years to play with until retirement.
However, I was coming to the same conclusion that I should chat to my IFA before investing for 2007/8 rather than continuing with the same investment. I just needed to get a better feel for these funds before complaining that I'd been sold a pup. Your explanation was very helpful for the performance to date. Cheers0 -
Risk is vital when it comes to investing. Getting the right risk that is. However, you do have to look at the consequences of not going with a risk option.
Stick it in cash ISAs at 5% and you with inflation at 4.4% (varies each month but it was 4.4% in Dec 06) then you arent really making much money at all.
Equity investments will go down as well as up but the stockmarket isnt all one risk and if you are low risk, you shouldnt go into it head first. However, dipping your toes a bit more into the lower end of the risk scale as far as equities are concerned wouldnt do any harm. You should also spread is a little more.
Before you go to your IFA, look at alternative funds such as Artemis High Income and look as a past performance graph. Take a look to see if the ups and downs with a fund like that would be acceptable to you. Past performance is no guide to future returns but it does allow you to get an example of the sort of volatility you could be looking at. Make sure you go back to include periods before 1999 to ensure you include the last stockmarket crash in there. Otherwise you may only see the good times.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Please could Dunstonh or any one else point me to a site which looks at fund performance beyond 5 years.
My IFA is suggesting a few changes to my portfolio and I'd appreciate some thoughts. Would I be breaking the rules by asking for some help. I'm basically not sure how adventurous the funds are or whether it might be usual to spread across several funds when each has fees etc.0 -
Citywire is one site which provides fund performacne history going back ten years. However, you should use information that old with caution, since fund managers who were around then are quite likely not to be managing the fund today. It can be helpful to assess how funds of that general type handled the stock market falls, though.
It's normal to use several funds. Using as many as 15 wouldn't be surprising if the total investment is 15,000, though the number would then become fairly stable as the amount of money increases. Not using 15 isn't necessarily a bad thing, it depends on how the funds are mixed and the types of investments - higher risk is likely to use more funds than lower risk.
Funds normally have an initial commission as a percentage of the amount invested in that fund, so it this is how you are paying for the financial advice, the number of funds will not cause the advisor to receive higher or lower commission, nor you to pay more in annual charges just because of the number of funds.
It's completely normal to have some funds above your risk level and some below, with the amounts in each evening out the risk and arriving at an average that matches your risk level. This lets you include some that are likely to grow better without having a big effect on how much overall balance might decrease in value temporarily.
If you say what the funds are I expect that someone will say something about their risk levels and how good they seem.0 -
if your funds are mostly in corporate bonds then they do poorly when interest rates are rising
Mike0 -
That's one of their advantages, when you combine them with stocks and shares: when the stocks and shares go down because of economy problems, general interest rates go down to stimulate the economy and bonds go up in value, reducing the effect of the downward move of the stocks and shares. The opposite happens when general interest rates rise, making the estimated peak interest rate time a good time to buy bonds.0
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Woah, I've been moved! OK, I'll keep this to ISA talk only. I'm prepared to be a little more adventurous than usual but by no means am I a high risk investor, so my IFA now describes me as having moderate risk tolerance.
My IFA has suggested moving my current maxi ISA savings from the Fidelity Moneybuilder Income fund into the Money Builder Balanced Fund so that 63% is in equities and 30% in fixed interest securities
As for this year, I have a lump sum to deposit, which has been suggested to go into the Jupiter Income Trust, whilst a monthly dripfeed of £250 pm goes into Rensburg UK Focus Trust to make up the remainder. He's suggested a few other changes for me but they're non-ISA. Can I talk about them here or should I start a different thread?
What do folks think of these funds? Rensburg don't seem to have much history, though I'm lead to understand that the fund managers have a good reputation. Initial charges seem to be 5% with 1.5% annual charges for both. Half the annual charge goes to my IFA as on-going commission, though he describes himself as fee-based concerning the initial charges? I want to check this as I'm thinking this means he gets the 5%. Could this be right?0 -
Half the annual charge goes to my IFA as on-going commission, though he describes himself as fee-based concerning the initial charges?
If he was commission and taking typical maximums then its 5%. The FSA averages show that average commission taken is 1.8% compared to 3%. Averages mean some take more, some take less but it gives you an idea of what you should be aiming for.
Like any job, if you go DIY, its cheaper unless you balls it up. You need to balance the cost of the advice and service and decide if its value for money or not.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Woah, I've been moved! OK, I'll keep this to ISA talk only. I'm prepared to be a little more adventurous than usual but by no means am I a high risk investor, so my IFA now describes me as having moderate risk tolerance.
My IFA has suggested moving my current maxi ISA savings from the Fidelity Moneybuilder Income fund into the Money Builder Balanced Fund so that 63% is in equities and 30% in fixed interest securities
As for this year, I have a lump sum to deposit, which has been suggested to go into the Jupiter Income Trust, whilst a monthly dripfeed of £250 pm goes into Rensburg UK Focus Trust to make up the remainder. He's suggested a few other changes for me but they're non-ISA. Can I talk about them here or should I start a different thread?
What do folks think of these funds? Rensburg don't seem to have much history, though I'm lead to understand that the fund managers have a good reputation. Initial charges seem to be 5% with 1.5% annual charges for both. Half the annual charge goes to my IFA as on-going commission, though he describes himself as fee-based concerning the initial charges? I want to check this as I'm thinking this means he gets the 5%. Could this be right?
Looking at this thread, by all accounts you do not trust your IFA and you should find yourself another one otherwise you would not be asking unknown people their opinions.
Leave him and find someone that you trust.
JoeKI am an Independent Financial Adviser.Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Different people have different needs and what is right for one person may be different for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.0
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