£80k trust/fund Inheritance

Schwartz334

Hi all,

I have recently been fortunate enough to inherit around £80k in Funds and Trusts.

I would like to get people's thoughts on the funds/trusts I have inherited as I am unsure whether to stick with them, or potentially sell all and put into a passive fund like Vanguard Lifestrategy 80 ACC which I already hold and am happy with.

The portfolio was set up with me in mind to get Capital Growth across a high risk range of ideas. I know past performance should not be used to judge future performance but versus the Vanguard fund it hasn't been amazing over the last few years prompting me to look at changing.

Any thoughts would be much appreciated

Schwartz334

I tried to add a link to a screenshot of the portfolio but wasn't allowed!

The number relate to: Cost Price Value Yield Income


Inflation Linked Securities

2800 Standard Life Global IL Bond I Inc 3876 £1.46 4088 0.6 25

UK Equity Funds

3000 Fidelity Special Values 6141 £1.85 5558 1.8 101
2100 Standard Life UK Smaller Cos Tr 3966 £3.50 7342 1.7 122

Global Equity Funds

2950 Aberdeen New Dawn IT 5183 £1.51 4451 2.5 112
1600 Brunner Investment Trust 8492 £5.33 8520 2.9 245
865 Henderson European Focus Trust 8309 £9.85 8516 2.6 218
425 RIT Capital Partners 4985 £16.38 6962 1.9 132
5000 Scottish Mortgage 4583 £2.56 12800 1.1 147
8600 Securities Trust of Scotland 10537 £1.34 11524 4.3 499

Financials
4300 F & C Commercial Property Trust 5153 £1.25 5388 4.8 258

Health Care
400 Worldwide Healthcare Trust 4874 £17.33 6932 0.8 52

Technology
1025 Polar Capital Technology Trust 3985 £5.71 5848

Apodemus

How are they held at the moment? As individual certificates, with a broker who is charging a fee, or on some other platform?

tacpot12

I've not looked at every fund, but the ones I looked at seemed ok. They do have some risk associated with them, but the performance seems to be in the right ball-park.

How are you measuring the performance of the portfolio and how are you comparing it to the performance of the Vanguard Fund?

Are you accounting for costs of holding the funds in your comparison? (Which is the thrust of Apodemus' question)

Who selected the funds initially, the person who left you the trusts?

Finally, do you need the mix of income and capital growth that this set of funds is giving you?

bigadaj

Well the difference in internal costs between the identified funds and vls will be acknowledged within the returns anyway, it's only the broker/ platform costs that may vary.

The spread of those holdings looks quite diversified, I'd put them into trustnet and see what the actual allocations are in terms of geographical, sector etc

There would be a significant difference between that holding and your vls portfolio, which an independent review would highlight, also this portfolio has been made more someone else and it's highly unlikely that it would be recommended for you, default position would be to sell and buy what you want or need.

How does this compare with your vls holding in terms of size, an £80k holding would push you into fixed fee platform territory, so may provoke a review of who you hold your investments with.

You will be able to cycle this sum into isas over the next five years or so, which will require selling and buying in any case. The other thing to consider is your pension situation, selling some of this holding and putting the money into a pension with tax relief could be an efficient strategy depending on your situation.

atush

the last bit above is what i was going to say.

You need to swap some of this each year (can be kept the same) into a S&S isa.

dunstonh

or potentially sell all and put into a passive fund like Vanguard Lifestrategy 80 ACC which I already hold and am happy with.

That is not a passive fund. It is an active managed fund with passive underlying investments. management decisions are made on the asset allocation and the frequency of rebalancing.

You mention trust. Is the holding currently held under trust? If so, will that remain the case?

If not held in trust, when did the assets become yours? (CGT may be a possibility if all sold in the same tax year)

I know past performance should not be used to judge future performance but versus the Vanguard fund it hasn't been amazing over the last few years prompting me to look at changing.

It wouldnt have been. Look at the period. Not the fund to begin with.

kidmugsy

Schwartz334 wrote: »

I would like to get people's thoughts on the funds/trusts I have inherited as I am unsure whether to stick with them, or potentially sell all and put into a passive fund like Vanguard Lifestrategy 80 ACC which I already hold and am happy with.

I wouldn't want a huge proportion of my wealth in only one company, even the estimable Vanguard. I might move my new assets into ISAs, taking the opportunity to change the investments at that time.

I might also check for overlaps: for instance, is there a large overlap between the sorts of thing that Brunner and STS invest in? I have a notion that STS has lately changed investment policy, so what once have been little overlap might now be bigger.

I would also check costs. My suspicion is that for investments in large companies in Developed Markets you might be better off in tracker funds/ETFs. For specialist purposes, Investment Trusts might be superior e.g. RIT and the SL Smaller Companies Trust, and perhaps something aimed at Emerging Markets.

I'd also have a look at the other two great tax shelters of our time: owner-occupied housing and pensions. And that's all assuming that you already have a satisfactory cash emergency fund, saved presumably in high interest current accounts.

In all this I've assumed that you are young enough still to be interested above all in growing your wealth. If you've reached the age of "deccumulating" different considerations apply.

Lastly, please note: we know so little about you that all of this should be taken with a pinch of salt.

Schwartz334

dunstonh wrote: »

That is not a passive fund. It is an active managed fund with passive underlying investments. management decisions are made on the asset allocation and the frequency of rebalancing.

You mention trust. Is the holding currently held under trust? If so, will that remain the case?

If not held in trust, when did the assets become yours? (CGT may be a possibility if all sold in the same tax year)



It wouldnt have been. Look at the period. Not the fund to begin with.

Apodemus wrote: »

How are they held at the moment? As individual certificates, with a broker who is charging a fee, or on some other platform?

Thanks to everyone for their answers so far. The portfolio is currently held with an investment management company who agreed with my mother to invest on my behalf for capital growth across some high risk ideas. I am aware that their costs are probably higher than most but my entire family uses the company.

I just arbitrarily compared by looking at graphs of the portfolio constituents versus the vanguard life strategy one. Not very scientific, but will have a play with Trustnet as suggested.

I am 25 and not looking to purchase a house for at least a few years. With this portfolio I am aiming for maximum capital growth. I have around £70k in current accounts so should be ok for a deposit when the time comes and am willing to hold the amount in the portfolio for 10 years + if necessary. I currently have £60k in the Vanguard fund held with iWeb and am actively putting this into a S&S ISA each year.

Pensions are already covered and for CGT the gain on the portfolio is around £13k so should be ok selling most of the holdings if needed without crossing the threshold.

Schwartz334

tacpot12 wrote: »

I've not looked at every fund, but the ones I looked at seemed ok. They do have some risk associated with them, but the performance seems to be in the right ball-park.

How are you measuring the performance of the portfolio and how are you comparing it to the performance of the Vanguard Fund?

Are you accounting for costs of holding the funds in your comparison? (Which is the thrust of Apodemus' question)

Who selected the funds initially, the person who left you the trusts?

Finally, do you need the mix of income and capital growth that this set of funds is giving you?

bigadaj wrote: »

Well the difference in internal costs between the identified funds and vls will be acknowledged within the returns anyway, it's only the broker/ platform costs that may vary.

The spread of those holdings looks quite diversified, I'd put them into trustnet and see what the actual allocations are in terms of geographical, sector etc

There would be a significant difference between that holding and your vls portfolio, which an independent review would highlight, also this portfolio has been made more someone else and it's highly unlikely that it would be recommended for you, default position would be to sell and buy what you want or need.

How does this compare with your vls holding in terms of size, an £80k holding would push you into fixed fee platform territory, so may provoke a review of who you hold your investments with.

You will be able to cycle this sum into isas over the next five years or so, which will require selling and buying in any case. The other thing to consider is your pension situation, selling some of this holding and putting the money into a pension with tax relief could be an efficient strategy depending on your situation.

Thanks to everyone for their answers so far. The portfolio is currently held with an investment management company who agreed with my mother to invest on my behalf for capital growth across some high risk ideas. I am aware that their costs are probably higher than most but my entire family uses the company.

I just arbitrarily compared by looking at graphs of the portfolio constituents versus the vanguard life strategy one. Not very scientific, but will have a play with Trustnet as suggested.

I am 25 and not looking to purchase a house for at least a few years. With this portfolio I am aiming for maximum capital growth. I have around £70k in current accounts so should be ok for a deposit when the time comes and am willing to hold the amount in the portfolio for 10 years + if necessary. I currently have £60k in the Vanguard fund held with iWeb and am actively putting this into a S&S ISA each year.

Pensions are already covered and for CGT the gain on the portfolio is around £13k so should be ok selling most of the holdings if needed without crossing the threshold.

kidmugsy

Schwartz334 wrote: »

I am aware that their costs are probably higher than most but my entire family uses the company.

Is that wise? If somehow someone absconds with all the family money you won't be able to help each other out.