Guidance on investment funds

dunstonh

You can going to need to clarify some more now.

Are you talking about investment bonds as in the tax wrapper? Have you chosen a provider that allows unit trusts to be held within the bond tax wrapper or are you looking at life assurance fund versions of the unit trust?

For reference, banks do not offer a selection of shares. They typically have their own range of unit trust/oeics (which are generally poor quality).

munk

hyposmurf wrote: »

I've managed to find two funds that I'm happy with.They are as follows:

http://www.h-l.co.uk/fund_research/security_details/sedol/B0WDH72.hl
http://www.h-l.co.uk/fund_research/security_details/sedol/B0LMN16.hl

You've pasted two copies of the same link here ^^

However I have a few questions.
The fund by Allianz RCMBRIC stars A, what does the stars A refer to I have also seen a stars C about.

Presuming you mean one of them is this then:
Allianz RCM BRIC Stars A Accumulation

The 'C' class share you're referring to requires a minimum investment of £100,000 and is aimed at institutional investors rather than the individual investor/retail market. For full details see the prospectus for the fund (worth doing in any case if you're thinking of investing in the fund!).

Regarding the Allianz RCMBRIC stars, the unit type is accumulation & type of payments are dividend.Does this mean that this a capital growth fund rather than one that pys a income?

Yes.

Regarding the Franklin Templeton BRIC, the unit type is Income & type of payments are dividend.Does this mean it is one that pays an income rather than a capital growth fund?

Yes - you can opt to have the income reinvested into your holding though in which case it's effectively the same as an 'acc' / accumulation fund. There's negligible difference between an acc and inc version of the same fund where the inc version of it gets it's income reinvested if I recall a similar thread about this on these forums recently.

Also the Allianz RCMBRIC stars fund manager appears to be very young and the fund doenst seem to have been going that long.This is something that puts me off the Allianz RCMBRIC stars fund a little, although it appears to be performing well.

I've just invested in this fund actually, although part of a larger portfolio. It certainly seems to have had a decent start to it's life, although in my assessment of it's riskiness I fully expect it has the potential to drop by as much as between 30-50% over a short period. As always I guess it's a matter of investing for the long term to smooth the bumps out and to keep a keen eye on how the fund is doing compared to it's benchmark/peers.

Although I am hoping to invest in one of these funds, looking at their performance I notice that they are both performing well would it not be wiser to hold out a little longer and wait until there is a a drop,with the steady increase in performance surely a dip is likely to occur.I now realise that I may have been better to have bought when the funds were performing porly last month!

Alternatively you could look at it the other way - if you wait another month the price might have gone up massively and you'll be able to buy even less units for your money! The joys of investing

hyposmurf

Heres the link I shouldve posted
http://www.h-l.co.uk/fund_research/security_details/sedol/B0WDH72.hl

Thanks for that help munk.That prospectus should be handy,cheers.

Also if I make further payments into my investment bond at a later date, will there be an initial charge for each payment?How would you go about having a income based investment bond pay straight back into the fund?

One slight snag I have come across is that on reading the Allianz portfolio it appears that they only off MAXI ISA to invest in their bonds.I currently have a mini cash ISA and its about half way through the tax year.How do I get around this?I have money invested in my cash ISA but want to invest in shares, but want to do this in the best tax efficient means.If I close my mini ISA and transfer to a maxi ISA then I'll loose my interest on my ISA for this half of the year.However if I dont cnahge over to a Maxi ISA then I'll have to remove some cash from my mini ISA into my current account and then purchase my investment bonds via my current account,which will inccur more tax.
Maybe Im looking at this incorrectly or am I doomed until the end of the financial year?
What would be the % taxd I'd pay if I didnt go through a ISA?
If I change my ISA to a maxi ISA will I actualy loose all of the interest from april until the date I change it?Or will I just loose out on the following part of the year that I dont have a mini ISA for?

EdInvestor

You can open a mini s&S ISA this year for 4k, leaving your cash ISA as is.Next year you can add 7.2k to the mini ISA, turning it into a maxi. You will also be allowed to turn your cash ISA into an S&S ISA ( but not the other way round.

Do you mean "investment funds" rather than "investment bond"?The latter is a separate product.

hyposmurf

EdInvestor wrote: »

You can open a mini s&S ISA this year for 4k, leaving your cash ISA as is.Next year you can add 7.2k to the mini ISA, turning it into a maxi. You will also be allowed to turn your cash ISA into an S&S ISA ( but not the other way round.

Do you mean "investment funds" rather than "investment bond"?The latter is a separate product.

Reading the portfolio by Allianz it refers to mini ISA accounts that they have one componenent only.It can have a stocks & shares,cash component or a incurance component.Your saying I can have a mini stocks and shares ISA component as well as my cash ISA.Maybe this portfolio is not up to date!

If I do open a mini stocks and shares ISA this year I'll probably be limited to low/medium risk UK companies that are on offer by investment companies.
If I save £7200 in my mini cash ISA how does this turn into a maxi ISA?Is it the limit of a mini cash ISA or the threshold at which I can effectively start up a maxi ISA?

How do I turn the cash ISA into a stock & shares ISA?Do you mean at the end of the financial year transfer it over?

munk

A maxi ISA can only contain stocks/shares and it can hold up to £7k. Alternatively if you want a combination of s&s and cash in ISAs in one year, you can opt to hold two mini ISAs - one s&s and one cash. The s&s component/mini ISA can be up to £4000 and the cash component/mini ISA can be up to £3000 (a total of £7000).

Very confusing, I was hoping it'd make more sense when I typed it out but I don't think it does to be honest...! Check this guide out for a better idea:

http://www.moneysavingexpert.com/savings/ISA-guide-savings-without-tax

(still confusing however you explain it!!!)

The amount you can invest from next year in ISAs goes up to £7200 and they're supposedly making them more straight forward by dropping the mini/maxi distinction and instead just calling the components 'stocks and shares' and 'cash' ISAs. I might have missed a trick here, but just re-labeling the ISAs doesn't really make it them any less confusing IMHO.

One good thing as EdInvestor mentions is that you can from next year transfer a cash ISA into a stocks and shares ISA - so if you have any old cash ISAs from before 2008/9 you can transfer them into your investment provider and allocate them to stocks/shares holdings.

You'd do this by completing an ISA transfer form at your investment broker/IFA. For example I use Hargreaves Lansdown so I'd go to their site, obtain a transfer form, fill it out and send it in, then they'd do a transfer from my old cash ISA provider and the proceeds would be invested in the funds I chose on the form.

hyposmurf

Munk your post is easy to understand don't worry the problem I had is that I think the guidlines for the ISA on the portfolio are out of date!
I've since realised that other discount brokers such as Chartwell and Chelsea offer these funds via mini s&s isa.So Im currently looking at who offers what.Anyone used any of these brokers before?There website looks a little basic and not much info compared to H&L though.
One thing I menat to ask is:
With these discount brokers many of them offer to cover the initial charge ,but if you decide to top up this fund at a later date, will you end up paying the initial charge or will they cover it again?

munk

I can't comment on chartwell and chelsea, I think I looked briefly at chartwell although admit I didn't look at chelsea when deciding who to use as a broker recently I know what you mean about the sites (chartwell anyway) looking basic compared to HL, didn't inspire much confidence in me - if I'm going for an online broker I'd like to have the best possible tools at my disposal to check on my investments regularly and get as much research info as possible. HL won out on this for me (though I have to say Bestinvest I think have the best online presence in terms of portfolio analysis tools and research, but they don't offer rebated AMCs/ann man charges like HL do).

With these discount brokers many of them offer to cover the initial charge ,but if you decide to top up this fund at a later date, will you end up paying the initial charge or will they cover it again?

I believe the discounted IC (init charge) applies regardless of whether you're just starting a new holding, switching money from one fund holding to another or topping up a holding. I'm new to this as well but as I understand it this is the case. Shoot an email to them or call them up to be sure.

hyposmurf

I went with Chartwell in the end.Even though their website doesnt look as apealling as H&L I can invest in the funds i want and the charges appear to be less.I can also have a quick look at my funds on H&L if I want.Thanks for your help.I'm going to wait for my account to be set up and now look around for maybe a low risk UK fund & eastern europe fund.Oh and maybe annoy you all with more questions

munk

Nice one