Help ! Money has more than doubled !

jamesd

nellykim, here's a prescription making lots of assumptions about what you want, but likely to be good:

1. Ask Hargreaves Lansdown or another fund supermarket for an ISA transfer form.
2. Fill in the form to transfer all of your current ISA holding to HL's vantage service, or that of another fund supermarket, with an "in specie" transfer, not sale and reinvest.

Once this is complete you'll have the same underlying fund investment but the fund supermarket will refund some of the annual charges, so you'll be a little better off. Now that the investment is in a fund supermarket you can more easily move the money to other investments....

3. Learn about "sector allocation" and decide how much of a drop you'll accept in one year (choose at least 20%, better 30%, if you can stand that). Then select a range of funds to invest in that will match that desired risk level, using one or two funds from each of several sectors. You'd probably end up with five to fifteen different funds.

Steps 1 and 2 are pure gain for you so nothing really to worry abotu there, except wondering if HL is the best fund supermarket for you - it's the most popular among regular posters here, it seems, so it's good enough.

You can take more time learning about sector allocations and risk and how to pick a range of investments. No great hurry to do that and it's cheap and easy to sell part of your investment with HL and put the proceeds into buying something else.

The smaller chunk may have been described as an OEIC because it wasn't in an ISA tax wrapper. It's really an OEIC in the ISA as well but they perhaps just described it as an ISA fund when it was in the ISA.

nellykim

hiya james, and thanks very much for the good advice. Ive got them up on screen now, and having a good look around it, bearing in mind what you say.

You have put it in a very easy to understand way, and I am thankful for that. I will seriously consider everything you ve said.

Whenever I have dipped in to this site, on moneysaving, the name of Hargraves Lansdown seems to crop up alot, so I will follow that lead, and trust to keep making a little bit more, over time

thanks again

RayWolfe

You hear about Hargreaves Lansdown a lot because they are by far the biggest. However I suppose they got big by being good. I have used them since 1996 and, in the main, been pleased with them.

nellykim

I have requested a transfer form from them, but am abit in the dark as to what to do after I transfer to them. There is so much information on their site about various products, and Im not really up on which to choose.

I understand that they give ONE valuation on your holdings, even though those holdings may be in different plans ( sectors ? ) - you see, I dont even know the terminology !

I may go for one of their Multi Manager Equity thingies, and, whatever else, ..I'm not being flippant, I just feel as though its pot luck with these things, the luck of the draw.

My old dad used to say, put your money on your bet, and forget about it, and if you win, so much the better... I dont mind a high risk. . I always think high risk does better in the long run anyway. I dont think I would be any good swapping and changing plans, like you're supposed to, and review regularly, would that really make alot of difference ? ....who knows, I may get the bug...Up to now, I've tended to stay in the same product and keep it on and forget about it, I've thought that was easier.

Everybody has a different approach I suppose, with the same necessary outcome - in the end, we want more money.

cheerfulcat

nellykim wrote: »

I understand that they give ONE valuation on your holdings, even though those holdings may be in different plans ( sectors ? ) - you see, I dont even know the terminology !

Twice a year they send you a valuation. It's broken down firstly into accounts ( ISA, PEP, SIPP ( pension ), ordinary fund/trading account); and then into separate holdings, so that you can see the value of each share and/or fund at the time of valuation. They also give a short opinion on each holding.

I may go for one of their Multi Manager Equity thingies, and, whatever else, ..I'm not being flippant, I just feel as though its pot luck with these things, the luck of the draw.

No matter what anyone says, chance does come into this in a big way, which is why you will do better with a spread of investments than just going with one. But funds are an expensive way of going about this, and multi manager funds are even more expensive.

If you can't be fussed with reviewing and changing your investments you might like to have a look at global generalist investment trusts. There are two which I am holding for the long term; RIT and British Empire Securities & General, ( which as you can see from the link has been around for many, many years ). RIT in particular holds investments in all sorts of assets, not just equities.

jamesd

One big signal to change away from what you have is given by the whole multi-manager team leaving Abbey. May be related to the Santander takeover or the generally average performance or both. In any case, a change of manager is usually a sign that it's time to move elsewhere. In this case it might eventually be beneficial since it hasn't been a great performer but that doesn't help you today.

If you look at the chart for the Abbey Multi-manager Equity fund you can see that it's a little above the global growth line, so it's better than a pure tracker but not by much. It's 51st out of 205 in 3 year performance for all global growth funds (including those that aren't multi-manager).

If you stick to multi-manager funds you might find this list sorted by three year performance useful. They invest in lots of different areas so you would pick one to five with different areas and decide on how to split the money around the different areas. Those beginning with HL with group Hargreaves are the Hargreaves-Lansdown ones.

When checking a choice, see how long the manager has been there, it's at the upper right of the Trustnet screen. You have to completely ignore performance before the current manager started, so if the manager hasn't been there for long you effectively ignore that option and pick a different fund.

If you wanted a single replacement for your current one I suggest considering the Jupiter Fund of Investment Trusts. It's in the same global growth sector as your current one but a substantially better performer, ranked 6th out of 205 over 3 years in the whole global growth sector, including those that aren't multi-manager. It seems to consistently do a good job, without concentrating excessively on say emerging markets because they are doing really well at the moment. It's very slightly lower risk than your current one. Here's a chart showing how it compares to your current one, the FTSE All-Share index and the FTSE All-world index.

You might also look at Jupiter Monthly Income (HL link)which is also multi-manager but pays regular income that you could withdraw if you choose the income rather than accumulation version. The accumulation one is the same investment but it automatically reinvests the money in the fund instead of taking it as cash. I included both versions on the comparison chart so you can see the effect of taking the income on growth. But income is money for you to spend so that's not a bad thing if you want some. It pays monthly and has been paying about 4% of the money invested in it per year, so if you put 10,000 into it you'd get about 400 a year or 33 a month in income. While paying an income it still grows strongly so the income would rise over time and faster than inflation, if it continues to do as well as it has.

At Hargreaves Lansdown you'd pay (lose to purchase cost) 0.25% of your money if you bought either or both of these.

If you don't want to change regularly yourself the suggestions from cheerfulcat or me are reasonable alternatives. In each case the fund manager decides where best to invest for you. You pay a bit extra for that in the charges but that's already reflected in the performance and the comparison tables show that it's not enough to make these poor performers.

If you want to learn more I recommend the book Fundology: The Secrets of Successful Fund Investing. It's an excellent introduction that will tell you all about the terms and about how a successful multi-manager fund manager goes about picking funds to invest in.

BigBelly

A lot of people believe that index trackers are better than managed funds. An index tracker is a fund which tries to match the performance of a certain index as closely as possible. For example, if you bought a FTSE 100 index tracker when the FTSE 100 is at 6,000 and sold it when it is at 12,000, you should have doubled your money.

Here are a number reasons for considering index trackers:

The vast majority of managed funds fail to beat the index over the long term.

Charges are usually a lot lower. You shouldn't need to pay more than 1% a year in annual management fees and there should be no initial charge. The management charges for managed funds compounded over several years can damage your returns.

Fund managers come and go so a market leading fund can be good one year and pants the next.

Financial advisors and financial institutions rarely recommend trackers as they don't make as much money out of them as managed funds.

debbie42

jamesd wrote: »

51st out of 205 in 3 year performance for all global growth funds (including those that aren't multi-manager).

If you stick to multi-manager funds you might find this list sorted by three year performance useful.

I can read the URL for these comparisons, but how do you actually configure them through the trustnet site? I have looked, honest!

debbie42

BigBelly wrote: »

Here are a number reasons for considering index trackers:

The vast majority of managed funds fail to beat the index over the long term.

Charges are usually a lot lower. You shouldn't need to pay more than 1% a year in annual management fees and there should be no initial charge. The management charges for managed funds compounded over several years can damage your returns.

Fund managers come and go so a market leading fund can be good one year and pants the next.

I've had index trackers over the past few years. A similar argument to the above (on TMF) convinced me to buy them. It was certainly an easy option, and beat building society deposits for that time, so I have no complaints, given my knowledge then.

The argument that the average tracker outperforms the majority of funds (based on management charges) is, with hindsight, rather misleading, as it is a generalisation, and doesn't reflect on the choice of the informed individual to concentrate on picking from the market leaders.

I'm moving mine now, being far more confident that if I pick from better performing funds, then the tracker performance can be beaten, and well, too, even allowing for higher charges. I am prepared to monitor my funds (and their managers) actively.

That's my current view, anyway. If someone knows otherwise to make me change my mind (again), then I'd appreciate it within the next few days before I transfer my second tracker!

BigBelly

debbie42 wrote: »

if I pick from better performing funds

Well, that is the big question. Is there any reliable analysis on whether the best performing fund in one year performs better than the index (after charges) in the next year? If so, then it would be worthwhile to change funds every year.