Switching investments within my PEP's ?

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
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GTGGTG Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
I have PEP's from 97/98 and 98/99, the investments are in HBOS and Fidelity European Fund respectively, the plan manager is Fidelity.

I may need the money from these plans in 6 to 12 months time but would be moving them anyway as I'm concerned about a down turn.

I have looked at corporate bond funds within Fidelity's Fund Network (which I think is the safest eligible investment). The problem is, is that this type of investment seems to have gone down hill since the end of last year. I presume this is because of BOE interest rate rises.

The only bond funds I can find which would protect the value of my money at the moment are the high yielders. The safest ones I've been able to find in Fidelity's fund network are the likes of Threadneedle and Newstar Extra High Yield Bond but these invest in sub grade or high risk bonds.

Can some one give me an idea of what sort of risk in terms of financial loss I would suffer in %tage terms of capital invested should things go pear shaped with one of the funds. Any other alternative suggestions would be also appreciated.

Thanks.
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  • oldfellaoldfella Forumite
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    if you need the money in 6/12 months I would cash them. The market is close to its peak. Corporate Bonds are going to continue loosing money as interest rates rise.

    Mike
  • GTGGTG Forumite
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    Been looking at UK Equity Income, can someone tell me what the differences are in funds ending in Acc and Inc?

    e.g Rathbone High Income Fund Acc

    Rathbone High Income Fund Inc

    There are many examples of this.

    I guess the abbreviations mean accumulation and income but why have two funds?
  • EdInvestorEdInvestor
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    One reinvests the dividends (Acc) and the other pays them out to you if you want an income.

    Lower risk equity income funds and perhaps a little commodities/oil (JPM, ML Gold and General) or property may be the best choices at present; I'd steer clear of bonds until interest rates have clearly peaked.
    Trying to keep it simple...;)
  • GTGGTG Forumite
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    EdInvestor wrote: »
    One reinvests the dividends (Acc) and the other pays them out to you if you want an income.

    Lower risk equity income funds and perhaps a little commodities/oil (JPM, ML Gold and General) or property may be the best choices at present; I'd steer clear of bonds until interest rates have clearly peaked.

    Thanks Ed, I'm looking at Schroder Income Fund Inc and Norwich UK Equity Income Fund Inc. They have performed well in the recent past and Alliance accepts transfers of these funds if I decide to remain in equities. The Norwich fund has a very impressive performance from a relatively new manager but I'm not sure if that's a good thing or not? The record of Schroders is not so good but there is a long established manager there.

    My first choice was Jupiter Income Trust but Alliance does n't administer this fund. I'm keen on Alliance because I like the cost effectiveness of Investment Trusts and they have a good selection and in some cases the same manager manages Unit trusts and Investment trusts of the same or similar names.
  • GTGGTG Forumite
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    GTG wrote in his original post
    I have PEP's from 97/98 and 98/99, the investments are in HBOS and Fidelity European Fund respectively, the plan manager is Fidelity.

    I have changed my investment strategy since my original post, I am trying to consolidate my funds into cash in one place (Aliance Trust Savings)to prepare for investing using Stephen Bland's (The Motley Fool) HYP strategy. I have a SIPP and ISA with ATS which I managed to get into cash by selling all my holdings in July a few weeks before the market turmoil. I recently transfered in my holdings in Fidelity European Fund then converted them to cash. Unfortunatley Fidelty told me that I could not re register my HBOS holding with ATS (or any other administrator) as they are windfall shares. I had intended to sell them in July when I sold off my other equities but hesitated as I would have lost the tax free wrapper as Fidelty do not allow you to hold cash in a PEP, would you believe? I obviously do not want to lose the PEP wrapper so the only way I can see to achieve the transfer to ATS is to use Fidelitys switching facility to switch into a fund which ATS lists in their investment choices booklet. I will need to find a fund where there is no intial fee and one which will not drop significantly should there be further falls in the markets before I can effect the transfer and sale.

    Can anyone see another solution or suggest a suitable fund please?

    Thanks in advance .
  • dunstonhdunstonh Forumite
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    You dont need to select and fund and re-register. You can transfer the PEP. Often on selection of new funds, that is the simplest and cheapest method.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • GTGGTG Forumite
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    "You dont need to select and fund and re-register"

    Que??

    "You can transfer the PEP"

    Fidelity have told me that because they are "windfall shares" they cannot be re registered/transfered to ATS, I assume that means any PEP administrator?
  • cheerfulcatcheerfulcat Forumite
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    GTG, I don't understand why Fidelity are making such heavy weather over this - transferring a PEP should be a fairly straightforward operation. One thought - have you been trying to effect the transfer yourself? It really needs to be initiated by Alliance Trust. You can choose to transfer in cash if you wish, or you can instruct them to transfer the funds, where possible. Have a look at the AT PEP transfer form, available here.

    Not sure about the HBOS shares but it doesn't really make sense. How you acquired them shouldn't affect the ability to transfer them.
  • dunstonhdunstonh Forumite
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    They cannot be re-registered but they should be transferrable.
    One thought - have you been trying to effect the transfer yourself? It really needs to be initiated by Alliance Trust.

    That is correct and any other way would not work.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • GTGGTG Forumite
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    There seems to be some confusion over the use of "re-register" and "transfer" here, I'm certainly confused anyway.

    This is what occured:-

    I completed and sent off to ATS their official PEP transfer form, the one listed on the page in the link given by cheerfulcat. On the form I listed both my Fidelity European Fund and HBOS holding and enclosed my most recent statement from Fidelity. A few weeks later I received a letter from ATS, below is an extract from that letter:
    I confirm receipt of the following units which have now been re-registered into our nominee name:

    Fidelity European Fund, Acc shares (Retail) x XXXXXX.XXXX

    We have also received correspondence dated 18th July 2007 from Fidelity which confirms that they have processed the instruction to transfer your eligible PEP holdings to ourselves, however, they have been unable to process the entire instruction.

    Fidelity have advised us that we cannot provide you with further information regarding the above.

    The letter finished by advising me to contact Fidelity.

    My email to Fidelity and their reply is below:-
    Dear Mr Unhappy Investor

    Thank you for your email.

    We recently received your request to re-register your Fidelity PEP holdings to Alliance Trust.

    Unfortunately, we have been unable to process the entire instruction, as Windfall Shares are not eligible for re-registration.

    I confirm that we have processed the instruction to transfer your eligible PEP holdings, confirmation of which will reach you by post shortly.

    If you have any further queries, please email me or contact our ServiceLine on LoCall 08457 44 66 00, where one of our Account Executives will be able to assist you. We are open Monday to Friday from 9am to 6pm.

    Yours sincerely

    Jane James
    www.fidelity.co.uk



    --Original Message--
    From: [EMAIL="GTG@emailaddress.co.uk"][email protected][/EMAIL]
    Date: 03/08/2007 16:39:27
    To: [EMAIL="info@fidelity.co.uk"][email protected][/EMAIL]
    Subject: PEP Transfer

    Comment : Why was the transfer/re-registration of my HBOS holdings to Alliance Trust Savings not allowed?


    ?????
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