Nax out stocks and shares isas

MarcoM

Hi,

We would like to invest x 2 whole isa allowance in stocks and shares.
We have enough cash reserves built and no debt.

We currently have an ISA with HL via the vanguard 80 equity product. This totals 11k.

Would you suggest we stick with putting the money into the same vanguard fund or should we diversify?
I am not enecssarily after diversification is this is likely to be more risky than our vanguard fund. I would like a similar sort of risk with same or better potential return. Would an emerging market fund help?
We would like to put the money in and forget it ie. a long term investment 5 to 10 years.

Thanks

gazzabboi

emerging markets seem to be doing ok at the moment, they are said to be very volatile though.

Uk smaller companies is probably a good bet.

Personally I will be going for the Liontrust special situations.

westy22

If you currently have £11k in LS80% and are looking to invest a further £23k (2 whole allowances) then I would be tempted to put the bulk of that new investment into the same fund to build up a healthy 'core' holding which gives you good diversification at low cost.

I would then use about 10-15% of the new investment to buy into one or more actively-managed 'satellite' funds in areas where I believed there were good opportunities and were under-represented in the LS80% - i.e. smaller companies, Japan etc.

Forever

If you don't want too much risk, you could consider one of the more defensive type funds which tend to come under the mixed asset umbrella (although not necessarily).

Defensive type funds tend not to do well when when the market rallies but when the market drops, they can still perform ok. Hence when you average things out over the long term, they can perform well. Therefore, these work in the opposite direction to tracker funds which do well in rallies and not well when the stock market drops.

I am currently aware of three which have a decent reputation which are Trojan, CF Ruffer total return and Jupiter Merlin balanced (the latter is expensive!). There are others but you will need to investigate to see what other funds are on offer to find one that has a good solid history, you agree with the manager's general viewpoint, the manager is a decent one and if you feel it is worth your money.

If you want higher risk and potentially greater rewards, there are many options and you would really need to investigate various sectors and funds to find a fund(s) that you feel suits you the most.

If you do invest in funds though, you really do need to keep monitoring your portfolio to check for no change of management in your chosen funds and to check it is still performing (keeping in mind that different sectors come in and out of vogue during the economic cycle).

As you have a fair amount of money, I would advise passing a fair bit of time with Trustnet, Morningstar and Google to find your best options. Alternatively, you could invest in seeing someone to do the homework for you but this will cost you obviously.

Good luck with it though OP

colalba

HL charge a platform fee of £24 per annum for the vanguard funds no matter the size of the investment. If you choose to invest more in the same vanguard fund it will therefore reduce the percentage you pay in annual charges.

MarcoM

Thanks for the replies.

At one point I even considered investing in a BTL but the hassle involved has directed me towards more S & S investments.

Is the Aberdeen EM fund still open to new subscriptions?
I seem to remember that this was about to close to new entries.
If it is available do you think it would be a good addition to the VLS fund? The returns look good but has it reached the top and can only come down?

Thanks

xylophone

I have used the Invesco Perpetual Distribution Fund (Acc) as a core holding for a number of years - I have seen a reasonable return.
It is possible to hold Gross Acc units in this fund within an ISA with HL if you are [prepared to accept you cannot deal online.

System

MarcoM wrote: »

Thanks for the replies.

At one point I even considered investing in a BTL but the hassle involved has directed me towards more S & S investments.

Is the Aberdeen EM fund still open to new subscriptions?
I seem to remember that this was about to close to new entries.
If it is available do you think it would be a good addition to the VLS fund? The returns look good but has it reached the top and can only come down?

Thanks

Yes you can still buy it on HL, but you have to pay a 2% initial charge. Have you looked at First State Global Emerging Market Leaders or Newton Emerging Income? Aberdeen Global Asian Smaller Companies if you want to go really exotic.

How do you know where the top is - that is the question. Emerging markets could just be at base camp..

MarcoM

teepee83 wrote: »

Yes you can still buy it on HL, but you have to pay a 2% initial charge. Have you looked at First State Global Emerging Market Leaders or Newton Emerging Income? Aberdeen Global Asian Smaller Companies if you want to go really exotic.

How do you know where the top is - that is the question. Emerging markets could just be at base camp..

You are right of course but looking at how ab em makts has performed over the past three years I am wondering if it can get any better now. Can it beat 25% return? That is why I am wondering if this fund can only go down.

I am getting into need to see an IFA territory with the sums involved but I want to have a stab at it myself. I have read Tim Hale's book and will be purchasing others.
The markets I am looking into are Japan and Sout America as I fell my vanguard fund covers enough of the rest. I guess I could look at commercial property via a fund but I think this is still a little too volatile.