7 year old Scottish Widows OEIC help?

ailuro2

My dh took out a Scottish Widows OEIC about 7 1/2 years ago,investing £3,000.(This was in the dark ages before MSE and t'internet!)

It is now worth £3,750.

Recently it has been doing a bit better but we just don't know enough about OEICs and how they actually work to know whether to get rid of it now,or keep with it and hope it continues to rise

We're about to remortgage and any spare cash will be going to pay off the mortgage.We don't need the OEIC money for anything else.

Any suggestions for what to do with it, or explanations to what this OEIC actually is?

Thanks in advance!

SeanW

It's an investment fund, a collective investment.

It stands for Open Ended Investment Company.

You'd need to provide more information for the other questions to be answered, such as it's name.

It's annualised return appears to have been just over 3%.

ailuro2

oh my- that was a quick reply!:T

On the scottish widows site we use to see how much is in it, it's called a

UK tracker, Investment Shareclass B income,OEIC,
Unit/share type I

means nothing to me,I'm afraid:o

SeanW

It's a FTSE 100 Index tracker. This means they invest all the money into companies that represent the FTSE100. That means if the FTSE100 goes up, so does the value of your investment, equally if it drops, so does your investment.

It most likely won't do any better than the FTSE100. It has a 1% a year charge, which is expensive for trackers.

Only you can decide whether to sell it for mortgage, or keep it, or even invest elsewhere.

dunstonh

You couldnt really have picked a worst time to invest though. Just about the highest point before they worst stockmarket crash in a generation. Had you invested just 4 years ago, you would have doubled your money. However, that is the nature of stockmarket investing and one of the risks of putting all your eggs in one basket.

A £3k investment should ideally have been 3 funds of £1000 in different areas. That can still be rectified as it can cost nothing to resolve that problem. Although you may prefer to use it against the mortgage instead.

EdInvestor

dunstonh wrote: »

You couldnt really have picked a worst time to invest though. Just about the highest point before they worst stockmarket crash in a generation. Had you invested just 4 years ago, you would have doubled your money.

True.

However, that is the nature of stockmarket investing

No, it's the nature of investing in index trackers: they go up when the index rises and down when it falls.

There are other ways of investing in the stockmarket that don't do this.

ailuro2

dunstonh wrote: »

You couldnt really have picked a worst time to invest though.

Yeah,we figured that out when it went downhill fast not long after he got it. :eek:

Lesson has been learned now that we are not into risking any of our hard earned cash.
We dipped our toes in the water and got a bit burnt, thankfully it wasn't the only egg in our basket, we still stashed some money in mini cash ISAs and paid off a reasonable chunk of our mortgage,so aren't too badly off.
It would be nice to see into the future though, if it's a ftse tracker.

dunstonh

We dipped our toes in the water and got a bit burnt, thankfully it wasn't the only egg in our basket

In reality you dipped your toes in the water and jumped right in at the deep end. Putting it all into one fund and picking a FTSE100 tracker at that was never a good move. For dipping your toes in the water you could have picked £1000 into an equity and bond fund (or UK Other Bond), £1000 into a property fund and £1000 into an equity income fund. Not only would it have outperformed it would be a fraction of the risk. Thats dipping your toes in the water.

You have a chance to correct that now. Don't sit back and hope that one of the worst performing stockmarket indexes in the western world is going to do it for you going forward.

ailuro2

Maybe a visit to an IFA is on order for us then, as we have not much idea what those are....

tyllwyd

ailuro2 wrote: »

Maybe a visit to an IFA is on order for us then, as we have not much idea what those are....

Before you visit your IFA, why not find a couple of books/magazines etc and read up a bit on it, so you will have a better idea of what they are saying when you talk to them. I don't know much, but I've been trying to find out more over the last few months, and it does all start to make a bit more sense quite quickly.

ailuro2

Yeah, good idea, maybe the library would be a good idea.

Anyone read any good money mags?

We got a subscription to one may years ago, but gave it up as it was too costly...:rotfl: