ISA Allowance - Indian & North American Funds?

MPN

I have not used my ISA allowance for this year and now have some money available to take out a full stocks & shares ISA for £15,240. However, with the markets being so high at the moment I don't know whether to invest it now or wait until Jan/Feb/March to see if the markets/prices drop?

Also, at the moment I have previously only invested in UK Equity, European and Global Funds but quite a few people have mentioned how well they have done investing in India (Jupiter India or Franklin India) and the North American market (Old Mutual North American Equity or Fidelity American Special Situations). I know these are more risky and volatile especially in India but I am considering investing about £5K from the £15,240 in these markets. Has anybody had any experience or knowledge with these funds?

Your thoughts/comments on these two points would be appreciated. Thanks.

bowlhead99

If you have already invested in "Global" funds then you would already have a large chunk of money in the North American market, as USA is the largest stock market on the planet and typically the biggest country allocation in any broad global fund, often getting on for half or more of the fund's assets.

If your preferred way to access international markets so far is with a "Global" fund which you already hold and which includes a large North America component, there is no point adding one extra fund specifically for "North America" as you will then have skewed your allocation way over toward USA and will probably need to also allocate a fund to Europe and a fund to Japan and a fund to other bits of Asia and so on to balance it all up again and avoid having all your eggs in one basket.

I am quite positive on India's prospects as one of the better "emerging markets" due to a variety of reforms which are broadly positive for business and investors generally. That is one of the reasons you will have heard people say they have "done quite well investing in India", depending on the timescale you are talking about. I hold JP Morgan's India Investment Trust (JII). Still, focusing on investing all your money in the place that has just already gone up a large amount, does not usually get you the greatest return over the next few years, as markets go up and down.

If your ISA holdings of global funds do not for some reason include "emerging markets", and you don't mind some risk and volatility in search of a greater return, it would make sense to change your global fund for one that does include at least a small element of emerging markets, or add an emerging markets fund on the side.

However, there are a whole bunch of emerging markets and it would be a pretty big gamble to just go for India ignoring the other EM countries such as China, Latin America, Africa, Russia, lots of countries in developing Asia and so on. I would advocate you using a broader, global emerging markets fund, of which there are loads to choose from as EM is a mainstream part of many people's portfolios these days. The fact I have JII among a whole load of niche specialist funds in my pension doesn't mean it's right for you, as you don't have all those other niche specialists to balance it all out, and perhaps don't have the same level of interest in running a complex portfolio.

As a side note I don't see why you need people with "experience" of those four specific funds you mention. You can look at the historic performance charts to see how they performed over the last 15 years or so to get an idea of what your returns would have been if those market conditions were to repeat themselves (not that they necessarily will). If person A says, "yeah I had that fund between x date and y date, I made a packet, I recommend it", you can probably take it with a pinch of salt until you also hear from Person B who says it is a very volatile fund that lost 60% between dates a and b.

You can see the top ten holdings and sector allocations of those funds by looking at their factsheets. If you can't answer for yourself why they will be a better choice than the other hundreds of US, emerging market, or global funds, then do not buy them.

MPN

Thanks Bowlhead 99.

I have just looked at the factsheets and the Old Mutual and Fidelity look solid enough for the North American market and the Jupiter India has continued to do well so they look good for a small punt.

Still not sure on whether to invest right now with my ISA allocation or wait until Jan/Feb/March time to see how the markets are then after the US election and he triggering of Brexit?

redmalc

MPN
Your concerns are in the back of most investors minds and I made a decision a couple of months ago to sell half of my portfolio and hold in cash which turned out to be the wrong decision.
I am now sitting with six figures in cash not knowing what to do,you will need to be comfortable with your own decisions.

MPN

Hi Redmalc

Yes, I know its a difficult one so maybe I will hang on for now as see what transpires in the New Year. However, as I mentioned these funds are continuing to grow now month by month!

george4064

MPN wrote: »

Hi Redmalc

Yes, I know its a difficult one so maybe I will hang on for now as see what transpires in the New Year. However, as I mentioned these funds are continuing to grow now month by month!

Naturally over the long term markets rise, that fact combined with your comment "these funds are continuing to grow now month by month" both emphasis the following saying;

"Time in the market, not market timing"

bowlhead99

MPN wrote: »

I have just looked at the factsheets and the Old Mutual and Fidelity look solid enough for the North American market and the Jupiter India has continued to do well so they look good for a small punt.

With respect, you're not giving us a particularly good reason to invest. There are many tens or hundreds of US-focussed funds that have "solid enough looking" factsheets given that fact sheets only typically show a chart of the last five years during which the U.S.has been in a 7-year bull market, which has looked particularly good when sterling took a 20% dive this year making all their dollar assets get a one-off boost in sterling terms.

I would put it to you that you don't really know in which part of an economic cycle a "special situations" fund would have a relatively better or worse time of things, and you are literally only choosing these two funds because you have heard of them and they "seem ok" for a random punt.

Given you don't even know whether you would prefer to invest in the USA now rather than after the election in mid November or even "wait and see" for six months until next March, you do not seem to have any confidence in timing the market, and no wonder, because nobody really knows what will happen next, as economics is only loosely tied to politics and we don't know the political outcome of the election or the final shape of brexit anyway. Once those things have happened the market will move one way or the other before you can do anything about it, and it might be good or it might not.

So if you are not confident on predicting the future I wonder how you can be confident on tilting your portfolio to North America rather than balanced global, or to India rather than other emerging markets. You are just putting a pin in the phone book and selecting an entry that starts with a letter one pin's length through the phone book, rather than taking a broad approach to build a portfolio from all the chapters of the book.

On your other thread you mentioned some existing holdings. In your pension you have 20% SJP North America (which is 100% North America) and you have 20% SJP International Equity (which is 77% North America) and you have 20% SJP Global Managed (which is 49% North America). Then in your ISA you mention having Newton Global Income (48% North America) and Artemis Global income (30% North America).

So, plenty of exposure to North American equities. Can you tell us why you also need a dedicated Old Mutual North American equities fund as well? And perhaps the only attraction of the "special situations" fund is that it's not designed to focus on high income stocks so might be a diversifer from your several other existing ISA funds that do.

I agree with redmalc that you need to be comfortable with your own decisions rather than reliant on guidance from here, but if you can't justify your allocations to us, I wonder how you are justifying them to yourself, other than "oh look, America went up, maybe I should get a specialist fund that only invests in America because it would have made money". All other specialist funds would have gone up when their respective areas of focus went up too. It's what funds do.

MPN

Thanks for your insight bowlhead99

You have quite rightly pointed out my inadequcies and I must admit I am a total novice at this and that's why in some way I joined the forum for other people's views, experience and advice etc.

Unfortunately I have had a bad experience with an IFA and it makes my SJP portfolio quite rewarding. However, as I mentioned now that I have retired I'm sure can spend more time and effort researching my portfolio or future investments.

I am very hesitant in making decisions on my pension portfolio but on my ISA portfolio's I have just gone with I felt was right and with an excellent track record over a number of years and the portfolio has done very well since I started in 2004,

I must agree with you that I am trying to find popular funds but at the moment it's the only thing I know
Regarding my allocation of NA funds, yes I do have a lot but that is because With the SJP funds they seem to be the best. However' I do have quite a few UK and European funds as wel to spread the risk.

If a
I could find a good IFA I would be more than willing to pay for decent advice.

slowpoke_rodriguez

MPN wrote: »

Hi Redmalc

Yes, I know its a difficult one so maybe I will hang on for now as see what transpires in the New Year. However, as I mentioned these funds are continuing to grow now month by month!

Day by day...

bigadaj

MPN wrote: »

Thanks for your insight bowlhead99

You have quite rightly pointed out my inadequcies and I must admit I am a total novice at this and that's why in some way I joined the forum for other people's views, experience and advice etc.

Unfortunately I have had a bad experience with an IFA and it makes my SJP portfolio quite rewarding. However, as I mentioned now that I have retired I'm sure can spend more time and effort researching my portfolio or future investments.

I am very hesitant in making decisions on my pension portfolio but on my ISA portfolio's I have just gone with I felt was right and with an excellent track record over a number of years and the portfolio has done very well since I started in 2004,

I must agree with you that I am trying to find popular funds but at the moment it's the only thing I know
Regarding my allocation of NA funds, yes I do have a lot but that is because With the SJP funds they seem to be the best. However' I do have quite a few UK and European funds as wel to spread the risk.

If a
I could find a good IFA I would be more than willing to pay for decent advice.

SJP have a reputation for being very expensive and charging heavily given they generally, probably always, just invest in their own funds. So aren't independent and there may be multiple charging levels that aren't clear to many investors.

It's likely that a local ifa could do as well, and maybe better, and certainly far more cheaply, so speak to a few in your area and hopefully you can find one you get on with and can trust.

MPN

Hi bigadaj

Thanks for your comments and I agree I should do some research to find a good IFA for proper advice.

Don't get me wrong I am quite happy with the growth from my SJP pension over the past 4 years, however as you mentioned a good local IFA may do even better but more importantly is independent, cheaper and has access to the full market.

I have invested the full amount in stocks & shares ISA's since 2004 and luckily these also are doing well but I have always on put money into consistently good funds.

Now that I have retired, I feel a good IFA will advise me on both the SJP pension and my ISA pot to make some sense of it all for the future.

I only ever mentioned the Old Mutual American and Jupiter India Fund because quite a few people have told me they are doing very well and keep on delivering for them so I just thought it was worth a punt and I thought some people on the forum may have invested in these funds. However, I now realise that I really don't know what I'm doing and I've been totally a bit lucky with my ISA's so the way forward is some good professional advice.