Best fund to invest in @ £50 a month?

kedj

For some background info on Multi-Manager funds, have a look at :-
http://www.citywire.co.uk/Guides/Guide.aspx?VersionID=90922

Probably a good option for £50 a month.

dunstonh

Multi-manager funds are overated and have a tendency to underperform. Fund of funds are the better option (cheaper then MM funds as well).

thewizz2009

whats the difference between MM and Fund of Funds?

dunstonh

Multi-Manager funds are designed to make an investor's life easier by packaging together teams of specialist investment managers into a single fund. The main Multi-Manager fund categories are Fund of Funds and Manager of Managers. There are quite obvious differences between the two categories, most notably that the first invests in funds, whereas the second invests in stocks and shares through appointed investment managers.

You tend to find reference to multi-manager or manager of manger funds as being the team of managers and fund of funds to indicate the one buying funds.

Effectively a fund of funds is buying into 10-50 unit trust/oeic funds at the discretion of the fund manager and controlling the allocation to keep it in line with the risk profile of the fund.
For example, the Premier Selector Balanced fund has the following top 10 holdings:
Newton Higher Income 5.1
Neptune Income B Inc 5.1
Standard Life Inv UK Equity High Income Inst Inc 5.1
Liontrust First Income 5.1
Rathbone Income Inc 5.0
Jupiter Income 5.0
Schroder Income Maximiser Inc 4.9
AXA Framlington Monthly Income Inc 4.9
Invesco Perpetual Income & Growth Inc 4.8
Royal London Corporate Bond 4.6


Someone with a small contribution couldnt spread it like that so that is where they really offer the benefit. You wouldnt really consider it for a larger investment as you can build your own spread.

kedj

dunstonh wrote: »

Multi-manager funds are overated and have a tendency to underperform. Fund of funds are the better option (cheaper then MM funds as well).

The citywire article is titled "Multi-Manager Funds" and discusses "Manager of Manger", "Fund of Funds" and "Multi-Manager" within this - so I may have my terminology slightly confused.
I wouldnt consider a "fund of funds" that only invests in other funds from the same investment company, as it isnt going to be strong in all areas. So I guess Multi-Manager fund of funds covers all bases!

EagerLearner

I'm confused with all these terms... when I call Hargreaves Lansdown to discuss funds, shall I mention 'fund of funds', 'multi manager', 'manager of manager'...?

dunstonh

I dont know how much help HL would be on the phone. They certainly cannot advise you unless you take their advice option and pay for it.

kedj

I know that HL do their own Multi-Manager funds - I dont know whether they might suggest (ie. not advise) these to you, if you ask about Multi-Manager products. Could not comment on HL's own funds myself.

Some of the Jupiter Merlin funds look quite interesting... check out the Standard & Poor information, you will need to register (free) with Morningstar :- http://www.funds.morningstar.com/
Some are AAA (highest S&P rating). But check the risk rating too!

You might also like to have a play around with BestInvest's planning tool :- http://www.bestinvest.co.uk/planning/portplan/portplan1.htm. You put in your investment timescales, risk tolerance and it gives you some suggested funds.

Liz_the_Whizz

Or you could just bung it into Invesco Perpetual Income or High Income like everyone else, judging from Citywire's most popular funds!

Not advice, just an observation.

And I know, dunstonh, we must not confuse popular products with good products

EagerLearner

Thanks guys, will have to look at this over the weekend. I just got my new issue of Moneywise, for once I might read the investment section