Making use of Stocks and Shares portion of ISA - With low risk

djblamire

I have never used the Stocks and Shares portion of a mini ISA, but I'm looking into investing into one before the end of the current tax year.

I would like very low risk, but as high a return as possible (while maintaining low risk).

I've had a quick look at some of the plans provided by Keydata - such as the Secure Income Plan - offering 7.5% per year over 5 years, or 7.7% per year over 7 years.

Does anyone have any better recommendations, or any comments on this particular plan.

Thanks in advance for any assistance,

Daniel

david78

Are you worried about losing your capital, or losing the income it can generate. I think you would be better with a low risk portfolio of unit trusts some of which could invest in bonds. Your best bet would be an account with one of the discount brokers -- see article on this site.

djblamire

david78 wrote: »

Are you worried about losing your capital, or losing the income it can generate. I think you would be better with a low risk portfolio of unit trusts some of which could invest in bonds. Your best bet would be an account with one of the discount brokers -- see article on this site.

A bit of both really. Primarily the capital, but would like to know that I will most likely get back at least the equivalent I would get in an average savings account, but with the opportunity to get back a lot more.

Thanks
Daniel

david78

If you don't want to invest in equities then stick to a good bond fund. Fidelity Moneybuilder Income would be suitable. Otherwise I would go with a UK equity income fund. (INVESCO Perpetual Income, Jupiter Income, Artimes Income, Rathbone Income would all be good picks).

djblamire

Thanks for your reply - sorry for the delay in replying.

I've been looking into this, and I am very interested in the Invesco Perpetual equity fund, although I see there are two:

INVESCO Perpetual Income
INVESCO Perpetual High Income

Do you happen to know if there is much difference between the two ??

Thanks
Daniel

jem16

The High Income version has performed slightly better but there's not much in it.

The main point with low risk(or any risk for that matter) is not to put all your eggs in one basket. If you were planning to use £4k for your ISA you should really have 4 funds at £1k each, with each fund in a different sector.

djblamire

jem16 wrote: »

The High Income version has performed slightly better but there's not much in it.

The main point with low risk(or any risk for that matter) is not to put all your eggs in one basket. If you were planning to use £4k for your ISA you should really have 4 funds at £1k each, with each fund in a different sector.

It is difficult to know which ones to go for. It has taken me quite a few weeks to decide on this one, and I'm not sure which others to go for - There are hundreds/thousands of them available.

Thanks
Daniel

dunstonh

Those funds are not low risk either. They are lower risk than a typical UK growth fund or UK FTSE Tracker but they cannot be classed as low risk. You can use them in a cautious spread but 100% into those would be classed as just above medium risk.

jamesd

Those funds are fairly low risk as far as funds investing in stocks go. If you want lower risk you could consider mixing in a property fund that invests in real property (look for street addresses in the list of holdings) and/or corporate bonds.

You should buy via a fund supermarket like Hargreaves Lansdown to save all or most of the initial charge. You can also lower your risk a little by investing regularly each month rather than in a lump sum. For now you could stick to picking funds from the Hargreaves Lansdown Wealth 150 selection to make the choosing process easier. The two you've identified are excellent choices.

Choosing just one fund is usually a bad idea because it exposes you to some risk from the performance of that fund, its manager and the style of investing that it does. Better a few funds that invest in different ways or parts of the market.

If you want to reduce the link to the UK market and its ups and downs you could use a European property fund and/or a global corporate bonds fund. Each of those is more risky than their UK equivalent.

If you want to increase the risk but add more growth potential you could add a global growth fund of funds (or just a plain fund rather than the multimanager type, but the fund of funds reduces risk a bit). This would also reduce the influence of the UK market.

si1503

djblamire wrote: »

It is difficult to know which ones to go for. It has taken me quite a few weeks to decide on this one, and I'm not sure which others to go for - There are hundreds/thousands of them available.

Thanks
Daniel

Invesco Income is a very well managed fund IMO. However as above it is not low risk and not really an investment for the risk adverse (at least not on its own).

Perhaps look at something like Atremis High Income or Baillie Gifford High Yield, both are UK other bond funds. You may also want to look at a bricks and mortar property fund, something like NUs Property Trust is a consistant performer in that sector.

Make sure you research any investments throughly before you invest though, use search engines, trustnet, H-L, morningstar (i think), there are some pretty good resources online that will help you and act as a good starting point.

djblamire

Is Hargreaves & Lansdown the cheapest place to invest in eg, Invesco Perpetual High Income ??

I notice there is no inital fee, and the discount the annual fee slightly.

I've just noticed that Selftrade offer no initial fee, and £25 annual fee (which will work out cheaper).

Anyone got any experience with Selftrade, and is this correct, or would that £25 annual fee be in addition to the one mentioned by Invesco ?

Thanks
Daniel