Help with ISA and Unit Trusts

MisterNick

dunstonh wrote: »

As I said though, past performance is useless as the current manager has only been in there weeks and plans to change the way the fund invests.

Thanks Dunstonh, a comprehensive answer as always.

I did not know that she was thinking of changing the strategy. My undersatnding was that by investing only in companies with a yield above x she was limiting herself in her ability to pick stocks. This may be very safe but limits the opportunity for growth.
I thought she was not intending to change the strategy, and the fact that she had operated in the Deputy role for so many years tended to reinforce this view.

On the question of commission, my point was that by taking 3.25% they are taking more than their stated maximum commission.
My docs show the average at 1.9% so it must have dropped since taking it out.

Once again thanks for the help

dunstonh

I thought she was not intending to change the strategy, and the fact that she had operated in the Deputy role for so many years tended to reinforce this view.

Who is "she"? Christopher Metcalf is the new manager, replacing Nick Clay and Rob Marshall-Lee (although Nick Clay is becoming deputy).

Metcalfe ran Schroder UK Equity from 2003-2006 and gave below median returns.

To quote one reference point:
the fund will be run with stricter controls in terms of sector weightings and company exposure. That may help keep risk in check, but the danger is that the fund will struggle to beat its benchmark. In that vein, it’s worth keeping in mind that Metcalfe’s prior underperformance at Schroder UK Equity was blamed in part on his reluctance to deviate sufficiently from his index.
the fund will be run with stricter controls in terms of sector weightings and company exposure. That may help keep risk in check, but the danger is that the fund will struggle to beat its benchmark. In that vein, it’s worth keeping in mind that Metcalfe’s prior underperformance at Schroder UK Equity was blamed in part on his reluctance to deviate sufficiently from his index.

My docs show the average at 1.9% so it must have dropped since taking it out.

The FSA average in Jan 05 was Nov 05 was 1.6%. In 2006 it was 1.5%. It went up to 1.8% in January this year. The figures are given by the FSA to put into the Menu's so there shouldnt be any difference unless the firm doesnt pay the advisers trail commission. Before 05, there wasnt a menu of commissions that was published.

Still, the point is the same as you make clear that it is above average (in any time period) and it is above the maximum they quote (which it shouldnt be).

carnet

dunstonh wrote: »

Who is "she"? Christopher Metcalf is the new manager, replacing Nick Clay and Rob Marshall-Lee (although Nick Clay is becoming deputy).

Think there is a little confusion here between Newton Income and Newton Higher Income.

Newton Income has been managed by Chris Metcalfe since 24.04.07

Newton Higher Income (the fund which the OP quotes in his original post) has been managed by Tineke Frikkee (female) since March 2004.

Personally wouldn't touch either of them.

MisterNick

Thanks again for the reply.

Carnet is right, it is the Newton Higher Income that we have, and Tineke Frikkee is the manager.

Having just had the meeting, I am left with a feeling that if I wanted safety I could probably have picked the funds or similar myself. They won't produce any great performance and will languish around the lower end of the tables, unless there is a crash of some sort in their particular markets.

I think what I wanted from an IFA was advice on diversifying and going into markets which I had not considered and if I had did not know which funds to invest in.
We have other investments in property, pensions, shares and so on and I was hoping that this would be something that could go into higher risk areas but with the opportunity for bigger rewards.

With the kids money, this is a mixture of them moving their money into unit trusts and us topping it up. They have recently turned 13 and 15 and pay £100 each a month into the Newton Higher Income. Is there any reason why they should not split their contributions between a UK fund and a Global fund?.

I need to think about what to do next, but I am still awaiting some answers.

Many thanks for all you help up until now and any further thoughts will be gratefully recieved.

dunstonh

Oops. Here I have been running on about Newton Income and you have the Higher Income fund. Sorry about that. Still as Carnet says, neither are up for much.

MisterNick

dunstonh wrote: »

Oops. Here I have been running on about Newton Income and you have the Higher Income fund. Sorry about that. Still as Carnet says, neither are up for much.

Thanks - no harm done, although I was a little confused by the performance figures and thought it was me.

Any thoughts on the kids question without giving advice

dunstonh

£50pm per fund is the usual minimum but Invesco Perpetual have £20 per fund is a minimum. Inv Perp have a lot of good funds and you could spread it even further than just two funds that way. That would give better diversification and maybe even allow a dabble into an Asian fund with £20 offset by their lower risk monthly income plus and higher income funds?