Decent equity ISA funds?

Conrad

In terms of the following, what might be some funds worth considering? I understand Investment Trusts have provided better returns that Unit Trusts?




+ Reputable large provider
+ Fair fees and deductions
+ A fund which is widely invested, not too concentrated in one sector


I could pay an IFA but hoping some folk on here closely follow this stuff and might give us some pointers. Until now we use Henderson / Framlington. Not sure how competitive and how well they stack up.

gadgetmind

The fees differences between ITs and UTs/OEICs aren't as great as they once were, but neither are they as cheap as passive investments.

What you first need to decide upon is asset allocation and only then start choosing trackers/funds/ITs.

bigadaj

A good starting point for many may be something like the vanguard lifestrategy or blackrock consensus funds. They cover world markets, you decide how much you want in bonds or equities and they are self balancing. Low fees if accessed through the right providers, fixed fee such as iWeb or iii for large sums or percentage for smaller funds such as charles stanley direct. Break point for this is normally the low tens of thousands.

Not advice just a suggestion.

Conrad

bigadaj wrote: »

A good starting point for many may be something like the vanguard lifestrategy or blackrock consensus funds. They cover world markets, you decide how much you want in bonds or equities and they are self balancing. Low fees if accessed through the right providers, fixed fee such as iWeb or iii for large sums or percentage for smaller funds such as charles stanley direct. Break point for this is normally the low tens of thousands.

Not advice just a suggestion.

I would prefer big names that have been around a long time. The sorts of names that pop into my head in terms of security are Standard Life, Scot Widows, Fidelity, L&G, Axa.


Something like a general managed fund with decent value charging structure.


In the past we were heavily into PEPs then ISA's but have largely exhausted them on buy to let property. One of our funds was Framlington bio tech fund but going forward we feel this would be too concentrated and risky. They have a managed fund but I have no idea how to compare charges against other managed funds. I tried one charging comparison site but it was a case of info overload and didn't even offer the option of a general managed fund filter, instead it was very specific giving filtering options such as developing nations funds or Asia Pacific. We want something like a fund of funds - do they still exist?


I think we're at the point of wanting to input all property rent into ISA's now and going at it for another 15 years.


I would not feel comfortable with relative new commers or companies that do not have a high profile and thus a lot reason to protect their brand. I feel lessor known companies would be for me a risk too far.

vectistim

I guess you want to look at a list _something_ like this:
http://www.trustnet.com/Investments/Perf.aspx?ctr=QS&univ=O&Pf_Sector=O:BALMAN
(A simple filter for Mixed Investment 40-85%)
You can then see a list of the funds in that sector.
Change the sector to select a different set of funds.
Mixed Investment is roughly Managed funds with the percentage being the rough level of equity exposure.

Personally I wouldn't be too impressed by the brand name. Most investment houses will excel in some areas and have some abysmal[1] funds in others.

[1] For some values of abysmal - I'd be surprised if every company didn't have some noticeable percentage of its funds in their respective sector's bottom quartile.

bigadaj

Conrad wrote: »

I would prefer big names that have been around a long time. The sorts of names that pop into my head in terms of security are Standard Life, Scot Widows, Fidelity, L&G, Axa.

I would not feel comfortable with relative new commers or companies that do not have a high profile and thus a lot reason to protect their brand. I feel lessor known companies would be for me a risk too far.

Apologies, blackrock and vanguard are only the two biggest fund managment groups in the world, though there is some debate about this, they are certainly far bigger than any of those you've suggested, but are American and don't have a long history in the uk, at least with a high profile.

I think you either need to do a lot more research yourself or go through an ifa.

gadgetmind

vectistim wrote: »

I'd be surprised if every company didn't have some noticeable percentage of its funds in their respective sector's bottom quartile.

Some companies even (allegedly) run a number of funds that aren't made generally available to the public. Some of these will do badly, some average, and some well. The latter are then promoted based on their track records to attract new business. The others are closed or merged and then conveniently forgotten about.

SallyG

"http://www.trustnet.com/Investments/...ector=O:BALMAN
(A simple filter for Mixed Investment 40-85%)
You can then see a list of the funds in that sector."
Once you've got the list in front of you - then what? - do you go for No 1 - or anything with max crowns/lowest risk - how do you choose?

Totton

I've had excellent returns from Henderson and Framlington funds. Many IT's are now more expensive than OEICS but the real benefit or hindrance for IT's comes from their ability to gear up on debt which they then invest. If you think markets are going up then IT's with gearing may be a better choice but if you think they are going down then that debt may be a burden too far in terms of any outperformance. (Okay it's a bit more tech than that but the gist is that gearing tends to help in a rising market)

Richard Pierson used to run the Axa Framlington Managed Balanced fund, not sure if he still does but that was a good fund for that type of holding and if looking then I would be tempted to scope its more recent performance etc.

vectistim

SallyG wrote: »

"http://www.trustnet.com/Investments/...ector=O:BALMAN
(A simple filter for Mixed Investment 40-85%)
You can then see a list of the funds in that sector."
Once you've got the list in front of you - then what? - do you go for No 1 - or anything with max crowns/lowest risk - how do you choose?

That particular selection contains quite a variety of different aims and objectives, so you can narrow it down to just the funds that broadly match the specifics you want. Then you can start looking at the volatility/past performance/charges/any recent changes that might affect risk/return. You will need to do this manually by looking in more detail at plausible funds.

eg: That list includes Vanguard 40/60/80% funds so it's down to the individual (or the adviser) to narrow the choice down to a specific fund(s).

Shaolin_Monkey

Conrad wrote: »

I would prefer big names that have been around a long time. The sorts of names that pop into my head in terms of security are Standard Life, Scot Widows, Fidelity, L&G, Axa.

Something like a general managed fund with decent value charging structure.

In the past we were heavily into PEPs then ISA's but have largely exhausted them on buy to let property. One of our funds was Framlington bio tech fund but going forward we feel this would be too concentrated and risky. They have a managed fund but I have no idea how to compare charges against other managed funds. I tried one charging comparison site but it was a case of info overload and didn't even offer the option of a general managed fund filter, instead it was very specific giving filtering options such as developing nations funds or Asia Pacific. We want something like a fund of funds - do they still exist?

I would not feel comfortable with relative new commers or companies that do not have a high profile and thus a lot reason to protect their brand. I feel lessor known companies would be for me a risk too far.

As others said, I would not be too concerned with going only with names you have heard of. The fact you weren't familiar with Blackrock or Vanguard (two of the largest fund management groups in the World) perhaps is a sign your investment knowledge is not what it could be For what it's worth Blackrock took over Merrill Lynch funds and a large chunk of Barclay's asset management business. Vanguard pioneered low cost index tracking funds in the US during the 70's and grew to be one of the largest asset managers today.

'General managed funds' are the ones in the following IMA sectors (depending on equity content they are allowed to hold) which superceded the old Cautious/Balanced/Active Managed sectors.

Mixed Investment 0-35% Shares
Mixed Investment 20-60% Shares
Mixed Investment 40-85% Shares
Flexible Investment (these are allowed to hold 100% in equity if they want)

They are pretty much intended for people who don't want to make too many decisions about asset allocation or which regions to invest in. But do be aware that there are also some odd ones in these sectors which just don't fit in anywhere else... Ruffer European for example is a European equity fund that also has held amongst other things gold, bonds and commodities, but sits in the 40-85% Shares sector.

Fund of funds are very much still about. They can be split into 'fettered' which means all the funds a FoF invests in are from within the same management group. The Vanguard Life Strategy and Blackrock Consensus funds fit into this category - as do some of the "traditional balanced managed" type funds. On the other hand "unfettered" FoF's which are better known as multi-manager funds can invest in funds from any company they choose. Some examples of this type are the Jupiter Merlin and Schroder Multi Manager ranges.

Fettered FoF's don't normally have a cost disadvantage over any other fund, however a disadvantage of multi-manager funds is that there are always two layers of charges - the underlying fund charges and the managers own charges on top.

Some argue that as long as the performance is good, the higher charges don't matter. My view is that over the long term, higher charges can't do anything other than drag on performance.

Managers can either outperform or underperform, but rarely do they consistently outperform, year in year out, over a long period, particularly with these very broad types of fund. What tends to happen is that conditions favour a particular investment style some of the time and not others, so managers have good and bad periods.

For that reason if I was just looking at one or two funds to invest in over the long term and not worry about too much, I think I would be inclined to look at the index tracking options - like the aforementioned LifeStrategy type funds. The highly diversified nature of them should ensure that they'll never be too far off the pace and over the longer term the low charges should start to pay off.