Share ISA and Funds questions

nihplod

Hello all, thanks in advance for any pointers.

Like a excited puppy, last year I decided that I should start to save a little more than I did so decided to put £300/month into a new Stock and Shares ISA. Following the advice on this site I went for the iWeb offer.

All well and good, putting money in and decided that I'd be better off purchasing Funds rather than shares directly.

The problem is I don't really know what Funds are - and I was hoping for some feedback from others on what I'm actually doing. I understand that they're a managed investment thing, they have different risk indexes and so on, but what I don't understand is:

1) does one only get 'profit' by selling funds for more than you bought them for, or is there also some sort of dividend?
2) specifically with iWeb, do you get charged for Fund transactions or only for annual management?

Thanks,

Steve

Lokolo

Funds are collection of investments. They tend to be specific to an area.

For example Schroders Global Emerging Markets will invest in equity based securities across the emerging markets globally.

There are usually 2 types of funds; Acc and Inc. Accumulation have dividends put into the price of the fund. Income distribute dividends and income. You will find over time, Acc will have a higher price than Inc, because Inc has given away cash instead of increasing the value of the fund.

Same Fund - different price

Acc - http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR04RWR
Inc - http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR04RWQ

You can search for Funds and use tools, such as Morningstars Fund Screen

http://tools.morningstar.co.uk/uk/fundscreener/default.aspx?Site=uk&LanguageId=en-GB


iWeb charges £5 per fund trade according to this page http://www.iweb-sharedealing.co.uk/charges-and-interest-rates/charges-for-all-trading-accounts.asp

badger09

nihplod wrote: »

Hello all, thanks in advance for any pointers.

Like a excited puppy, last year I decided that I should start to save a little more than I did so decided to put £300/month into a new Stock and Shares ISA. Following the advice on this site I went for the iWeb offer.

All well and good, putting money in and decided that I'd be better off purchasing Funds rather than shares directly.

The problem is I don't really know what Funds are - and I was hoping for some feedback from others on what I'm actually doing. I understand that they're a managed investment thing, they have different risk indexes and so on, but what I don't understand is:

1) does one only get 'profit' by selling funds for more than you bought them for, or is there also some sort of dividend?
2) specifically with iWeb, do you get charged for Fund transactions or only for annual management?

Thanks,

Steve

What Fund, or Funds did you actually buy through IWeb, or is your £300 a month just sitting in your S&S ISA account as cash?

IWeb charge £5 per transaction. So, if you are buying Funds every month, you will pay £5x number of Funds bought.

IWeb do not make an annual charge charge for holding your S&S ISA, but each Fund will have an annual (Fund Manager's) charge.

mac08

Hello, I'm very interested in the "taking" of profits in a fund. I am invested in fidelity China special situations. After a low key start the fund is now up by 45% since I started investing. obviously I hope the fund continues to go up and up but I realise these gains could easily be wiped out. E.g like blackrock gold down 50% . So my question is, should I cash in some profit from funds?

AlanP_2

mac08 wrote: »

Hello, I'm very interested in the "taking" of profits in a fund. I am invested in fidelity China special situations. After a low key start the fund is now up by 45% since I started investing. obviously I hope the fund continues to go up and up but I realise these gains could easily be wiped out. E.g like blackrock gold down 50% . So my question is, should I cash in some profit from funds?

For future reference - Convention is to start your own thread rather than asking a new question on someone else's ;).

Is that your only fund?

Ideally give some thought to what spread of investments you want to diversify your risk across - asset types (cash, bonds, funds etc.) and across geographies when it comes to funds.

Then sell / buy the appropriate assets / fund(s) on a regular basis (annually is a popular choice) to maintain that balance.

That way you sell the ones that have risen in price and buy the ones that have dropped in the previous period (Buy Low, Sell High).

nihplod

No no, I've bought 2/3 different ones (off the top of my head I remember Vanguard UK and one Blackrock one) - but I've never noticed the £5 charge with iWeb which is bizarre...

The ones that pay dividends - is it often annually (April?)

Thanks all, very helpful

nihplod

This is all really helpful thank you all - I suspect then I should not expect dividends from the Acc-type funds but maybe from the Inc-type funds... There is rumour that each fund has a pay-date but I cannot find this information anyway, could someone help me with that please?

AlanP_2

The Distribution Date should be on the Fund Factsheet available from each providers website.

NOTE - It can take an amount of time for the cash to be credited into your account so don't expect to see it the same day.

nihplod

That's what I thought, but I just can't see it?

I've some investment in fund GB00B29LZ795 (Miton Income Instl Inc) but cannot find the distribution date anywhere.

AlanP_2

Putting "Miton Income Instl Inc" into Google comes up with a number of results, the first of which is Morningstar. If you follow the link, then select Documents from the menu on the left and choose Factsheet from the documents on offer you will get a copy.

Looking at they talk about Accounting Periods of March (final) & September (interim) which may relate to payout dates, not 100% sure.

nihplod

Ah ha, thank you!