FTSE All Share Tracker?

mollycat

Hi All,

Anybody think that opening the above would be particularly wrong at present?

I know that anticipating where the market is going to go in the medium term is next to impossible right now, but with my cash ISA allowance maxed and not wishing to go into property, I'm not sure if opening a tracker would be better or worse than just letting my money sit in the best savings account.

Would be looking to drip £300 per month for up to 6 years when I retire, probably into HSBC All Share Tracker which has low TER.

As always, opinions of yourselves are very much appreciated.

Thanks.

GeorgeHowell

Why not hedge your bets and put half the money in the tracker and the rest in a term savings account ?

Hooloovoo

In just a FTSE tracker? No, probably not a good idea.

In a global tracker, or separate trackers that give you global diversity ... maybe.

I've got a quite detailed thread running here on just this subject that you may like to read.

opinions4u

Would tax relief on a pension scheme mean it would be better to invest in a tracker (or other lower risk fund) with a pension wrapper?

Especially if your top rate of tax will change on retirement.

Linton

What time frame are you looking at - when would you want to withdraw the money?

If the answer is say the six years you have til retirement then IMHO an allshare tracker or any other 100% investment in equity (shares) would be risky in that prices could well be lower than your purchase price when you wanted to sell. Look what has happened to share prices in the past 6 years. And the problem is that in these troubled and global times share prices around the world tend to move together responding to "events", at least in the short term.

If you dont need to touch the money for longer then the risk decreases.

So depending on your other savings (perhaps the risk is a very small % of your wealth and doesnt concern you) I would agree that you could sensibly put part of your money in a savings account or alternatively you could put the whole lot in a managed balanced or cautious managed fund where the fund manager allocates the monies between shares and much more stable investments such as government bonds.

I am assuming that you do have say 6 months living expenses in available cash so that you can deal with any emergencies without needing to sell your investments.

mollycat

opinions4u wrote: »

Would tax relief on a pension scheme mean it would be better to invest in a tracker (or other fund) with a pension wrapper?

Especially if your top rate of tax will change on retirement.

Thanks for the replies so far.

Hoovooloo.....Thanks for the link, good reading, some ideas there.

Opinions4U......Pension is sorted thanks, am on a final salary scheme.

Just wondering what people think bout throwing cash at tracer as opposed to savings given context of low interest rates/ ongoing financial uncertainty.

Thanks.

jimjames

If you are looking at a tracker then make sure you get an ISA that has low charges. Hargreaves Lansdown used to be good but now charge £2 per month to hold the HSBC range which is not good for small amounts.

Splitting £300 across different trackers covering different markets might be worth looking at. Say £100 UK, £75 US, £75 Pacific, £50 Europe. At least then you aren't just tied to the UK market but as per questions above do you have any other investment holdings? What other amounts in cash? Investments are not ideal to hold for emergency savings as the value might drop when you need the cash.

mollycat

Linton wrote: »

What time frame are you looking at - when would you want to withdraw the money?

If the answer is say the six years you have til retirement then IMHO an allshare tracker or any other 100% investment in equity (shares) would be risky in that prices could well be lower than your purchase price when you wanted to sell. Look what has happened to share prices in the past 6 years. And the problem is that in these troubled and global times share prices around the world tend to move together responding to "events", at least in the short term.

If you dont need to touch the money for longer then the risk decreases.

So depending on your other savings (perhaps the risk is a very small % of your wealth and doesnt concern you) I would agree that you could sensibly put part of your money in a savings account or alternatively you could put the whole lot in a managed balanced or cautious managed fund where the fund manager allocates the monies between shares and much more stable investments such as government bonds.

I am assuming that you do have say 6 months living expenses in available cash so that you can deal with any emergencies without needing to sell your investments.

Hi Linton, thanks for posting.

In answer to your points,

No, wouldn't definitely need access in 6 years time to any stock based investment i am taking out at present, although i would probably reduce my investment.

Have got £43K ish in Cash isa, (fixed at 4% for 2 years).

Own house outright, (worth ? £200K).

Take home £2K a month with no real outgoings, other than normal living expenses.

So, as you can see, I have a bit of spare money I could invest each month and I'm pretty frustrated at the thought of inflation eating into this if it just "sits" rather than "works".

The issue is of course, given the economic climate, would throwing money at a tracker be even WORSE than not doing that over say, the next 10 years or so.

I suppose that is the point on which I'm wondering what everyone else thinks.

Cheers

Linton

mollycat wrote: »

.....
The issue is of course, given the economic climate, would throwing money at a tracker be even WORSE than not doing that over say, the next 10 years or so.

I suppose that is the point on which I'm wondering what everyone else thinks.

Cheers

As you are buying regularly rather than investing a lump sum you really want share prices to be performing badly for several years - you get more units for your £ than if the stock market was performing well.

Hopefully over say 10 years underlying growth including dividends should have exceeded the random variation (and a cash deposit) . Now it is up to you to judge which fund is most likely to supply this underlying growth.

To me, if a tracker is what you want, a global tracker or perhaps a mix of US, Far East, and yes OK a bit of FTSE seems more likely than a pure FTSE tracker to come up with the goods and with less variability. But there are a very wide range of options, each of us could produce a different recommended set of investments.

coastline

In my ISA I trade this one...in and out...not invested all the time..

http://www.iii.co.uk/investment/detail?code=cotn:ISF.L&display=summary&it=letf

mollycat

Linton wrote: »

As you are buying regularly rather than investing a lump sum you really want share prices to be performing badly for several years - you get more units for your £ than if the stock market was performing well.

Hopefully over say 10 years underlying growth including dividends should have exceeded the random variation (and a cash deposit) . Now it is up to you to judge which fund is most likely to supply this underlying growth.

To me, if a tracker is what you want, a global tracker or perhaps a mix of US, Far East, and yes OK a bit of FTSE seems more likely than a pure FTSE tracker to come up with the goods and with less variability. But there are a very wide range of options, each of us could produce a different recommended set of investments.

Coastline, thanks for the tip

Linton, Cheers! Thats what i'd also thought....more units accumulated when stocks more static in value.

So, if I wanted to put together a "mixed" tracker as you suggest, with an ISA wrapper what is the easiest way to do this, just deal direct with the provider, eg HSBC etc?

Again, many thanks, this is exactly the type of advice I was looking for