Family Balanced Trust - advice please!

Jim02

Hi,

I have a Family Assurance Balanced Trust ISA. It was originally taken out to part-pay off a mortgage, but that requirement has been superceded now. I stopped paying into it a few years ago. In total I've paid about £3.5k into it; it's currently worth about £2.4k.

I was hoping to hang onto it until it's value came back up at least as far as my investment costs, but it's been quite static for the past twelve months or so.

Would I be better off transferring the money to an Index Tracker or even cash ISA, or leaving it where it is? I'm not in desperate need of the money any time soon, but it's quite disheartening seeing it languishing there month after month without any growth!

Thanks

Jim

dunstonh

Thats a bit worrying. Most UK equity funds (that are at least half decent) have broken even since the crash and the big funds have gone on much above that. Over the last 12 months, I would have expected around 10-15% growth.

You don't say what fund you are invested in currently? The performance you have had is in line with US rather than UK.

A tracker may be more suitable but a UK equity and income fund has been better in recent times and I believe that will remain the case for a while longer. A comination of funds is always more desirable.

A cash ISA would offer capital security but lower potential growth. If you accept the risk and get into funds you understand and match your risk profile and don't need the money (like you say), then there is no reason why it cannot stay as an equity ISA.


edit: Reading your post again it suggests that the fund is a balanced fund. If that is the case, then switch it. Balanced managed funds are generally dire. They try to be all things and up being nothing. Usually they are used by tied advisors who are not allowed to recommend funds so you end up in the default balanced managed fund. So, if this is the case, a switch/re-registration with a fund supermarket and picking 2 funds more suitable would make sense. One thing to check first though is if there are any exit penalties on surrender/transfer.

Paul_Varjak

Family Assurance (now know as Family Investments) is a Friendly Society and sells direct to the public. Their funds are rather few and, although managed by New Star, none have a higher than an S&P two star rating (rather poor).

I would look to switching to another provider, but bear in mind that HMRC rules do not allow you to switch between an equity ISA and a cash ISA.

Jim02

Thank you both for your advice. I've been pretty sure I want to do something more pro-active with the money, but felt unhappy at bailing out before at least making my investment costs back. However, it looks like the best way to make this happen is to move the money elsewhere. C'est la vie.

Cheers

Jim