Natwest Balanced Fund Accumulation S&S isa

Mechanical

I have one of these and was wondering whether to keep it or transfer the money elsewhere;

(Unable to post the funds.ft.com link)

I opened this isa back in 2007 and made regular monthly payments plus a couple of lump sums (at the wrong time it seems), but due to personal circumstances these ended 2 years ago and I haven't paid anything in since. Todays value is approx £5500 which is only about £100 more than the total amount I have actually invested. The historic maximum value was around £5750 some time ago.
Therefore, as I haven't been able to use up any of my cash isa allowance this tax year I am considering shifting this money, if possible, into a new cash isa. Would this be a wise move?
Any advice would be much appreciated.

brewerdave

You can't move S & S ISAs into cash ISAs. Only the other way round.

dunstonh

I opened this isa back in 2007 and made regular monthly payments plus a couple of lump sums (at the wrong time it seems),

Not at all. Making regular payments during a period of volatility is great timing. However, you need to wait for the recovery to happen and that is where you are being a bit premature.

Would this be a wise move?

selling the ISA to cash (you cant move to a cash ISA) requires a crystal ball. it is probably fair to say there will be times the S&S ISA is better and cash is better. When and over what period is something no-one can tell. More importantly perhaps is your capacity for loss. If it does go down say 20% in the short term then does that affect you?

Mechanical

brewerdave wrote: »

You can't move S & S ISAs into cash ISAs. Only the other way round.

Now you mention it, that actually hadn't occured to me. By transferring I really meant withdrawing the total amount and then shoving it into a cash isa.

Mechanical

dunstonh wrote: »

Not at all. Making regular payments during a period of volatility is great timing. However, you need to wait for the recovery to happen and that is where you are being a bit premature.

selling the ISA to cash (you cant move to a cash ISA) requires a crystal ball. it is probably fair to say there will be times the S&S ISA is better and cash is better. When and over what period is something no-one can tell. More importantly perhaps is your capacity for loss. If it does go down say 20% in the short term then does that affect you?

Looking back, it seems my regular payments were made at the right time, but unfortunately the two lump sums were not which I didn't realise when I made them. My fault for not paying attention.

As I see it (please tell me if i'm not seeing it), I have £5500 in this S&S isa and I have paid into it around £5350, so it hasn't made me much at all over more than 4 years. Also looking at its historic performance over 5 years the highest the share price has been is 284 (nav in gbx) in April 2011. Today it's 262 and if it drops below 253 I calculated that it would be worth less than what I have invested.

Since I do not have any funds for this years cash isa I thought it would be a good idea to use the money available in my S&S isa, then at least my money would be earning interest instead of lying dormant.
I'm unemployed at present, so I wouldn't want to take a financial hit although it wouldn't kill me.

Hope i'm making sense.

PS If I decide to keep my money where it is, what is the best way to manage a S&S isa such as this?

dunstonh

As I see it (please tell me if i'm not seeing it), I have £5500 in this S&S isa and I have paid into it around £5350, so it hasn't made me much at all over more than 4 years.

You wouldnt expect it to. 4 years is far too short a timescale. You are not giving it a chance to average our those ups and downs. A full economic cycle is around 8-10 years. So, are only just about half way through one and not the best part of one either.

Since I do not have any funds for this years cash isa I thought it would be a good idea to use the money available in my S&S isa, then at least my money would be earning interest instead of lying dormant.

Your investment is not dormant. It is subject to investment returns which will zig zag on their way.

PS If I decide to keep my money where it is, what is the best way to manage a S&S isa such as this?

Not natwest. Banks are poor quality nearly across the board. However, if you want more control (and quality) then you will need to do some reading and understanding of how investments work. The fund you are in is a bog standard fund for a lazy investor. Never will be worst. Never will be best. You cant do much wrong with it.

I'm unemployed at present, so I wouldn't want to take a financial hit although it wouldn't kill me.

Could you afford to take say a 20% hit on value and leave it there to recover? Capacity to loss is key in a decision like this. If you cant afford it then you shouldnt take the risk.

Mechanical

dunstonh wrote: »

You wouldnt expect it to. 4 years is far too short a timescale. You are not giving it a chance to average our those ups and downs. A full economic cycle is around 8-10 years. So, are only just about half way through one and not the best part of one either.


Your investment is not dormant. It is subject to investment returns which will zig zag on their way.



Not natwest. Banks are poor quality nearly across the board. However, if you want more control (and quality) then you will need to do some reading and understanding of how investments work. The fund you are in is a bog standard fund for a lazy investor. Never will be worst. Never will be best. You cant do much wrong with it.



Could you afford to take say a 20% hit on value and leave it there to recover? Capacity to loss is key in a decision like this. If you cant afford it then you shouldnt take the risk.

Thanks for your reply dunstonh.
I could take a 20% loss I suppose. It was worth considerably less in 2008/2009, but recovered a lot since then.
If I decide to keep it should I keep a check on the share price and if it plummets again, wait for it to bottom out then buy, with regular payments and a lump sum if I have the cash of course (and a job)?
Is that the way to do it?