Move from Cash ISA to S&S ISA for a better return?

jabbahut40

Hi,

I have £40K in cash ISAs between myself and my wife. We have no mortgage and have 6 months emergency funds in a savings account. In recognition that interest rates are so poor (and effectively eroding our capital due to inflation) I was wondering whether there are any thoughts on what S&S funds I could consider to invest to bet inflation, taking low/medium risk with a view to invest for 5 years.

Thoughts welcomed.

Jabba

Ps - I've already got S&S ISAs from previous years which has £16K invested across various high risk active funds.

BLB53

You could have a look at investment trusts - whether you would consider these to be low/medium risk I don't know but I have been holding ITs for income for many years and they have served me very well.

If they may be of interest, here's an article on RIT last month which you might find useful.
http://www.retirementinvestingtoday.com/2013/01/investing-for-income-via-investment.html

jabbahut40

BLB53 wrote: »

You could have a look at investment trusts - whether you would consider these to be low/medium risk I don't know but I have been holding ITs for income for many years and they have served me very well.

If they may be of interest, here's an article on RIT last month which you might find useful.
http://www.retirementinvestingtoday.com/2013/01/investing-for-income-via-investment.html

Thanks BLB53. Is there any different between ITs and other income funds other than generally lower charges?

Jabba

jem16

jabbahut40 wrote: »

Thanks BLB53. Is there any different between ITs and other income funds other than generally lower charges?

Jabba

The lower charges for ITs is probably not valid any more with the advent of RDR.

bigfreddiel

BLB53 wrote: »

You could have a look at investment trusts - whether you would consider these to be low/medium risk I don't know

actually its fall into the same range of safe to volatile as uts,etfs or plain old equities - so there'snot much difference really

reits oth must pay out a high %ge which in itself is a risk

my advice - vanguard lifestrategy fund or you own blend of cheap trackers in the classic equities/bonds mix 60/40 maybe

or ftse100 with yld 3-5% divi cover at least 2x low debt increasing divi for last 5 years

dealin chunks of £2000 to keep costs down if buying shares

funds may be free -depends on platform

goodluck

fj

BLB53

Is there any different between ITs and other income funds other than generally lower charges?

If you are interested in an income, ITs are more steady and predictable and churn out a rising quarterly dividend - whereas funds can be a bit lumpy as they can't hold back income in good years to smooth payouts.

Also I don't trust fund managers with hidden charges like soft commissions (see Telegraph article today) - they suggest what you pay for funds is not 1.5% but more like 3%.

Of course this might equally apply to ITs but I have not come across it.

Charges for the likes of City of London are around 0.4% and yield 4.4% at current prices.

Vanguard LS funds are cheaper but then theres the platform charges eg £2 per month per fund with HL or £12.50 qtr with Sippdeal.

Shares could be another option - again a good article on RIT in January if this might be of interest.

cashbackproblems

Have a look at bonds which pay a good 4/5%, im invested into 2 bonds via HL which pay 6% and 9% respectively but some might consider these higher risk (both have done well over the last few yrs iv held them).

Alternatively Blackrock trackers via HL are lower costs than funds c0.5% but you probably wont get the big 10%+ annual gains you do with some funds