basic answers needed about fidelity

wigglyworm

hi i have a fidelity moneybuilder uk index fund.
i pay £50 a month and have done since 2005.
while i researched funds at the time and opted for fidelity i just forgot about it.it is only now that we are on a tighter budget that i am looking in to things.
i realized i don't even know such basic things so i have questions, sorry for being such a noob.
1. so far i have three mini isa 2005,2006,2007 can i just sell these any time and if so will i have to pay a charge.
2. if i wanted to cancel my £50 how do i do that.
basically i do not know how my £50 is invested and ends up as a mini isa,
i do not even know what is meant by a fund price.
i am struggling with £50 a month but if you think it is worth persisting with i would carry on investing.or should i take out my mini isa and invest it else where (the three so far are worth about £1200).
sorry for being so stupid but i did start all this before i brought a house and it is only now i am tightening up the finances.

Primrose

Firstly, you can close your mini ISA's at any time and cash them in but you will lose the tax advantages for ever. You can't reopen them for past tax years. I presume you are paying by Standing Order? if so, you have to write to your bank and cancel it. If you are paying by Direct Debit you will have to contact Fidelity and get them to do it.
Every monthly £50 payment is used to buy a certain number of units in the fund. There are two prices for units. A higher price to buy them and a lower price at which they are sold. When the stock market drops, the prices of units drops too and you will buy more each month for your £50. If you look in the F. Times or Telegraph at the Unit Trust Prices page you will find your fund listed under Fidelity. If you are hard up you can stop the monthly payments. Your previous years' funds can still remain intact. The 2007 fund will also remain, but have fewer units since you have not been buying monthly units for a whole year. You can't "take out" your mini ISA and move it to an ordinatry savings account without losing the tax advantages. You can only "transfer" in to a different fund manager's funds and they must do the admin, otherwise you lose the tax advantages. You also can't convert it to a mini cash ISA. So if money is tight your options are to leave them in where hopefully the values will grow in time, but stop making any more monthly payments or cash them in and lose the tax advantages.

caliston

wigglyworm wrote: »

1. so far i have three mini isa 2005,2006,2007 can i just sell these any time and if so will i have to pay a charge.

Yes. you can sell them (or any part of them) at any time. You might have to ask Fidelity but I don't think there will be a charge. If you want to keep invested in stocks and shares then you might be better to transfer to another fund, or to another stocks and shares ISA provider rather than cashing them up though.

2. if i wanted to cancel my £50 how do i do that.

Ring up Fidelity and ask them to cancel. Or you can do it online if you still have the login for their website. You'll still keep your existing holding, you just won't be adding to it.

basically i do not know how my £50 is invested and ends up as a mini isa,
i do not even know what is meant by a fund price.

Instead of holding shares yourself, a fund buys the shares for you (and the other X thousand investors subscribed). That way you save on dealing charges (a £10/month dealing charge would eat up your £50/month rather quickly) and means you can buy fractions of a share in many more companies than you would be able to on your own. So the Fidelity Moneybuilder UK Index fund holds shares in 629 companies.

But the value of the shares in these 629 companies goes up and down. There's about a billion pounds in the fund at the moment. If you want to add £50 to that fund, the fund has to buy enough shares so it holds £1,000,000,050 proportionately in each of the 629 companies.

The fund is like a share of shares. The fund price reflects how much all the constituent shares fluctuate - if they've mostly gone down then the fund price will be lower and you'll buy shares for your £50. If they've gone up you'll buy fewer. If the fund price was £1 and you invested £50 you'd get 50 units. If the fund price went up to £2 you could then sell those 50 units for £100.

i am struggling with £50 a month but if you think it is worth persisting with i would carry on investing.or should i take out my mini isa and invest it else where (the three so far are worth about £1200).
sorry for being so stupid but i did start all this before i brought a house and it is only now i am tightening up the finances.

It wouldn't be fair for me to give advice on what investments you should make, as it all depends on your judgement and attitude to risk (and I'm not a Financial Adviser). As the UK Index fund is a tracker, it depends whether you think the FTSE All Share index is going to go up or down in future. If it's down then you'd cut your losses by selling now. If it's up then you have the option of buying more units or just holding onto the ones you have. Or you can buy units in some other fund, or switch your existing fund to another.

What 'in future' means depends on how long you can afford to hang onto the investment. If you need it now, or next year, you have less time to wait for a recovery if things go badly than if you can wait 5 or 10 years.

I don't know how much you've invested (how many months at £50/month) which would indicate whether you'll get your money back. I'd recommend doing some more reading to understand what your investment is doing so you can make your own decisions about it. (There's the 'see a Financial Adviser' option here too, but that's probably not cost effective unless you have £x,000 involved). However I'd probably suggest not to put more into investments until you have a better understanding of what's going on - can you remind yourself what you learnt two years ago?

Jake'sGran

I have money invested with Fidelity in a PEP and have changed to other funds a couple of times. There has been no charge. I don't think there is anything exciting about the one you have but you can easily check how it compares with other similar ones by looking at various sites that offer this sort of info like Digital Look, iii, etc. The last time I changed my holding with Fidelity I chose a good one as it has increased in value very well in just one year.

It should be easy to stop your standing order with your bank. If you bank online you can do it quickly. For example, with Smile banking I could cancel a S/O on line now. Make sure there is no penalty to pay to Fidelity. You can arrange to see details of your account with them on line. You just need to register with them for online access.

wigglyworm

thanks everyone for your response i think i am almost their with regards to understanding this.a couple more questions if i may.
1.is my mini isa for 2005,2006 and 2007 continually used to buy shares or invested.
2.i have looked up my fund in the ft and see a selling price a + - and a yield what does the yield mean, is it the + or - selling price difference.
i am paying by d/d at the moment and i know you can't give advice but it is difficult to decide what to do. i think i will leave my funds that i have already and hopefully the may gain something, it is th £50 a month that i can't decide on.i know it is obvious that if i can or can not afford it that should sway it but, i could probably juggle things around so i may have something for the future i do understand investing is a long term thing.
thanks again anyway.

munk

1.is my mini isa for 2005,2006 and 2007 continually used to buy shares or invested.

Unsure but I believe that each year a new ISA account will be opened by fidelity into which the £50 monthly payments will go - so for example currently you'd be paying into your 2007/8 ISA account and you'd have a couple of other accounts with all the payments in for the 2005/6 and 2006/7 years.

2.i have looked up my fund in the ft and see a selling price a + - and a yield what does the yield mean, is it the + or - selling price difference.

The +/- just indicates whether the fund price has gone up or down over the period for which the listing covers (look at the very bottom of the listings page, it should tell you there about all the annotations). The % yield indicates how much - if any - the fund pays out as a dividend. If the yield was 5% and you had £100 invested, you could expect around a £5 dividend to be paid out yearly. This dividend would either be paid out to you by cheque in the post, paid straight into your bank account or would be reinvested into your investment if you opted for that option (sometimes this is just set up as the 'default' for inc funds, see below).

There may or may not be a dividend payout for your fund depending on the type of fund it is - income or accumulation (abbreviated to 'inc' and 'acc' quite often). Income funds basically pay out an income, so the yield on income funds is usually 2-3% at least pa - although the yield constantly changes so any figure you see is only ever a very rough guide.

Alternatively accumulation funds don't pay out any dividends and instead focus on growing the initial amount you invested more intensively by 'channeling' any gains from the fund (that might otherwise be paid out in divs) back into the fund so it grows more.

As mentioned above, you can also opt to have the div payments from an income fund paid back into your holding so it grows more - similar to the way accumulation funds work.

Also, if you purchased the fund through Fidelity, you should be able to get an online login to access your fund account via the fidelity website - so you can view the progress of the funds more easily and get a better idea of how they're doing.

If you look here you can get the phone details:

http://www.fidelity.co.uk/direct/contactus/index.html

they should be able to tell you how to get a login for the website if you wanted to do that.

If you didn't already know, your fund can be seen here:

Fidleity Moneybuilder UK Index fund