Ok then - How do I choose a S&S ISA!

jamesd

Before buying a h-l managed fund, take a look at the alternative funds in the sector. I wasn't impressed with their global multimanager one, which ranked 48th of about 200 global growth funds in 3 year performance.

debbie42

I'm coming in a bit late here, but am thinking of switching my tracker isa to a more actively managed fund (either by me, or by a professional).

FWIW I find TMF forums (NOT their editorials) to be as helpful as here when discussing issues. It's individuals at the end of the day, just as the forums here.

Mr_Mumble

jamesd wrote: »

Here are the ranks for the top global growth multimanager funds from 2003 through 2006:

Neptune MM: 1 2 6 105 New manager and owner
M&G 22 8 19 30
Halifax 13 7 14 25
Jupiter 7 4 10 7

All four seem to be funds of Investment Trusts which have the structural advantage in a bull market of:

1. Discounts to NAV.
2. Financial Gearing (borrowing)

March 2003 onwards has been a bull market. It is only natural for these funds to stay at the top of performance leaderboards due to their structural advantages over other funds, nothing to do with the aptitude of the manager.

At the end of the previous bear market, 2002, the Neptune multi-manager fund finished 120th out of 121 global growth funds losing 43.4% of its value. Again, not because of the ability of the manager but because of the structural disadvantages of such a fund in a bear market.

stphnstevey

Ok, now confused!

Just spoke to H&L and thought I understood. Thought I could

a) Invest in their ISA and choose which funds
b) Invest in their managed fund via an ISA and not have to worry about what funds to invest in

But now told that their manged fund is just like all other funds! So I am back at the start again, picking my own funds. For a savy investor, that might be just how they like it, but for me who is making their first real share investment, I am stuck back at not having a clue which funds to pick.

I look through their 150 funds and some funds are great and some have had a rubbish previous 6ys and can't understnad why H&L recommend them!

Think I will get a dartboard and choose funds that way!

Not happy

dunstonh

I look through their 150 funds and some funds are great and some have had a rubbish previous 6ys and can't understnad why H&L recommend them!

Their 150 list has quite a poor reputation.

Think I will get a dartboard and choose funds that way!

Sector allocate, match your risk and pick your funds on the basis of future potential, not past performance. In some areas that means taking a guess but as long as you sector allocate, then it wont be a problem. The bulk of returns are where you invest. Not the individual fund you invest in.

jamesd

Their managed funds are just like all other funds in that you buy and sell it as a fund. Lots of fund choices around.

If you go the fund of funds route then the choices within it are out of your hands and it's mostly down to picking a sector and a fund of funds, dramatically narrowing the number you have to choose between.

It's very unlikely that I would pick any of Hargreaves Lansdown's own funds. I've yet to see one that I thought was worth buying.

carnet

dunstonh wrote: »

The bulk of returns are where you invest. Not the individual fund you invest in.

Just to stress how true this is, there was recent research which looked at the best sectors to each year end since 1980 and selected the worst managers in those sectors.

The results were compared against the best managers in the worst sectors.

The results on a £3437 starting investment were a staggering £1,000,000 for the worst managers and a paltry £1323 for the best managers.

Focus on sector selection - fund selection is just fine-tuning.

debbie42

We've some ISA allowance left for this year which I was thinking of putting in lower risk funds. I'm comfortable with high risk, but have enough of that elsewhere.
I've been trying to follow this thread, but am a bit confused as to how to assess "risk" and pick sectors etc. I've a link to the H-L site which I was planning on looking at, but any other links, info or explanation would be very welcome.

stphnstevey

Thanks everyone for everyone for sticking at answering my inexerienced questions!

I guess I have the same question as Debbie - Which sectors would you consider high, mdeium and low risk?

To take it a step further, what % of each sector would make up high, medium and low risk portfolio?

dunstonh

Which sectors would you consider high, mdeium and low risk?

Its not just sectors. Different funds within a sector have different risks. For example, in the UK Equity Income sector, Invesco Perpetual High Income Fund is slightly higher risk than Artemis Income. Or in UK Other bond sector you have M & G Optimal Income fund rated quite a bit higher risk than New Star High Yield Bond.