Good or bad?

frivolous_fay

Ok, please don't leap down my throat... I think I have made up my mind about this product, but I just want to see if I'm with the majority!

Minimum investment - £1500
After 6 years, get your investment back, plus either:
50% (If the FTSE has gone up)
6% (If the FTSE has gone down)

Verdict?

dwsjarcmcd

Sorry Fay but a poor deal. The 6% is hardly worth it and you could get something capital protected that gave you a lot more than 50% of the FTSE growth, particularly over that length of time.

A commission generator for whoever is recomending it!

David

frivolous_fay

dwsjarcmcd wrote: »

A commission generator for whoever is recomending it!

Fancy that, it's limited availability too!

Aegis

Sounds horrible to be honest... 50% in 6 years equates to 7% per annum, and with an investment product you would be hoping for a lot more than that in 6 years. And it's not even guaranteed to be that percentage.

All in all, I reckon you'd be better with a good investment in some unit trusts.

Old_Slaphead

Aegis wrote: »

Sounds horrible to be honest... 50% in 6 years equates to 7% per annum, and with an investment product you would be hoping for a lot more than that in 6 years. And it's not even guaranteed to be that percentage.

All in all, I reckon you'd be better with a good investment in some unit trusts.

True - but MCs on unit trusts, at now at between 2-3%, are also starting to look a bit ridiculous....esp when most underperform the market.

Aegis

Old_Slaphead wrote: »

True - but MCs on unit trusts, at now at between 2-3%, are also starting to look a bit ridiculous....esp when most underperform the market.

Most of the ones which underperform the market are bank funds. Ignoring them and going for the ones with decent managers and a half-decent track record at outperforming the index, you find that they're extremely good in the medium to long run.

I'm not sure which funds have AMCs of 3%, but that really does sound ridiculous! I'd probably steer clear of ones that expensive if they didn't have a strong probability of making that back

Aegis

Just to be sure, I checked mine, and they vary between 1.5% and 1.75%, and they are all discounted by my fund supermarket by about 0.25-0.50% each.

Old_Slaphead

Probably my terminology is wrong - on recent HL blurb, the 5 promoted products had Total Expense Ratios (TERs) in excess of 2% the highest (and toppish performer) being Melchior Asian Opps at 2.81%.

No problem when they're outperforming (but 75% don't) and markets are heading north.

Aegis

TERs are generally a little higher than AMCs, but not by too much usually. I'd agree that a TER of 3% would be nasty, especially if the fund underperformed cf the index or similar lower-priced funds.

I found this link on my search for TERs, which seems quite useful: http://www.investmentfunds.org.uk/investors/find_fund/default.asp

bristolleedsfan

frivolous_fay wrote: »

please don't leap down my throat... Iquote]

:cheesy: .......... :cheesy:

Old_Slaphead

Aegis wrote: »

TERs are generally a little higher than AMCs, but not by too much usually. I'd agree that a TER of 3% would be nasty, especially if the fund underperformed cf the index or similar lower-priced funds.

I found this link on my search for TERs, which seems quite useful: http://www.investmentfunds.org.uk/investors/find_fund/default.asp

TERs usually add around 0.25%-0.50% onto AMCs which means that many funds are now 2%+ on total charges....no wonder financial adisers are keen to promote (what with trailer commission et al) and there's big bonus payouts at management groups with average or below par performance.