Unit Trust ISA

jamesd

EagerLearner, do be aware that you're jumping into the current equivalent of tech stocks buy buying China at the moment. No problem long term since after any crash you'll get the units at a good price, but you might be unhappy in the short term at the change in value of the earlier purchases.

"don't fancy Japan as heard it's volatile". You're not fancying the stable, developed Japan because you've heard it's volatile and you're buying into China which is hugely more volatile! A lot of people have lost a lot of money in Japan over the years since the early 90s but today it's nowhere near close to the time-bomb that China probably is. It's entirely conceivable that the Chinese markets could fall to 25% of their current value within a few days of trading.

With a China fund you're buying into just about the most volatile unit trust investment there is today (assuming no hedge funds have finished launching yet...).

I've nothing specifically directed at China yet this is what I'm currently invested in, giving percentage of my holding, percentage growth last year, type:

38.0	36	Global Equity Large Cap Blend
9.1	35	UK Equity Large Value
9.1	44	Emerging Europe Equity
8.6	55	Europe ex-UK Small/Mid Cap
8.2	81	Latin America Equity
7.7	46	UK Equity Small Cap
6.6	48	UK Equity Small Cap
6.5	44	Europe ex UK Equity Large Cap
2.2	28	UK Equity Mid Cap
2.2	39	UK Equity Small Cap
0.9	69	Emerging Markets Equity
0.9	54	Russia Equity

If repeated none of those would give any reason at all to complain and the weighted average return would be 45%. It's really not necessary to jump so far into the deep end to do extremely well compared to bank accounts.

Other observers might notice the lack of US, Japan and much general emerging markets, as well as the lack of bonds. It's deliberate, with the 38% one filling in the US sufficiently via that portion of its holdings.

EagerLearner

Thanks Jamesd, I know what you mean but we specifically wanted to invest the £200 in a risky market, hence China. But we won't be adding any more to that fund.

Now the rest will be in less risky such as Europe exc UK etc - had looked at Allianz BRIC a while ago and someone I work with recommended German property (same person who says he wants to move a large portion of what he has to cash at the moment).
I didn't get a chance to get a paper anyway. This is such a huge leap for me in terms of learning - I am a MoneySavingMaven to most people I know, so I need to really start to learn as much as poss and absorb from you kind folks on here.
My first week learning has been good - will take on any tips you have and fund suggestions with the obvious caveat that they are not recommendations but a starting point for my research.

jamesd

EagerLearner, assuming you're interested in more at the higher risk end still you might consider European small companies and Emerging Europe funds. Both can be expected to suffer more than the general markets if there's a big sell-off, but both are fairly likely to do better than average in good times. Neither is likely to suffer as badly as China could. Sticking with emerging markets you could go with Emerging Europe and Latin America instead. Latin America could also enter meltdown territory but the downside risk is lowered by the range of countries involved.

Better, though, is to decide on your perfect allocation percentages ignoring the amount of money available. Hargreaves Landown will accept orders in the tens of pounds if asked. Even online when selling and switching in one step; you could sell 175 of the 200 and buy 7 other funds at 25 each.

EagerLearner

Hi Jamesd, thanks for info very helpful for me to gain as much info as I can (I'm a sponge, me...) - in terms of how much I can invest, the funds seem to show '£500 minimum' or '£1000 minimum' on the info pages. Is that not true then? It would seem to be as HL accepted my £200 for the Jupiter China fund with no quibble.
I remember reading you should only have 5-7 funds anyway not to spread yourself too thin and also to make monitoring easier. I suppose I am in it for the 5 year plus term so any considerations you have are greatly received.
Would be interested to hear from any other women who are investors, bit scary sometimes seems like just a man thing, but I can't be the only one in here surely...

jamesd

Those are for direct investment if from places like Trustnet. Hargreaves Lansdown combine multiple orders so the minimums don't apply except for unusual cases of uncommonly traded funds. It's unlikely that you'll be after one of those. If in doubt, give them a call and chat about it - the gentleman I checked this with was friendly and helpful.

They can't tell you what to buy or where to invest because they aren't allowed to give advice but they can tell you all you want to know about what Hargreaves Lansdown will let you do.

The right number of funds is at least one for each sector you want to be invested in. It's not so hard to monitor 15 or so and that's really about all you'd need to cover a broad range of sectors. I have 12 but three of those are different types in one sector and I'm not covering 3-5 sectors, so I could do all I want with 15.

To start you'll be fine with 5-7 since the amounts are still quite low. Or even 3 if you really just want to cover three sectors. You can start with relatively few and split them later if you like.

EagerLearner

Hi jamesd - thanks for the info - I put in £200 onto the account today and then called them and placed an order on the phone as it was too small to do online. I went for Lazard Emerging Markets, £200, should hear on the next few days if the fund manager will allow my transaction.
That way we have the Jupiter China and this one. Technically the Jupiter one is our 'joint' fund and the Lazard one is 'my' one. I plan to add £200 more next week perhaps, just trying to research what my next area should be - worried that Europe funds don't seem to be doing that well right now, so was thinking Emerging European instead such as Jupiter Emerging European? UK and Europe mainstream seem to be a bit iffy right now even in my limited knowledge...

jamesd

Emerging Europe looks reasonable to me but do watch out for political uncertainty relating to Putin's successor or Putin changing the rules and staying on. That could push the market lower in the short term.

EagerLearner

Thanks jamesd - your help on this is much appreciated as you explain things so well - the financial papers and online sites do seem a bit wordy so it's helpful to have someone speak to me in Plain English ;o)))) Any further tips you have (if you still have patience) feel free to share... how long have you been investing for?

jamesd

EagerLearner, I'm a beginner, just a year and a bit. Might help me to explain things though. Look to those like dunstonh for real experience.

cheerfulcat

EagerLearner wrote: »

Would be interested to hear from any other women who are investors, bit scary sometimes seems like just a man thing, but I can't be the only one in here surely...

Not at all - there are plenty of female investors, but they don't necessarily post on forums. And even when they do, usernames don't always give away ones gender! People just seem to assume that posters on financial boards are men...

There is a ( very quiet ) board on TMF called " Women's Finance and Investing " which you might like to look at.