Maximum to hold in a single fund/IT

Robie

Hi

Simple questions, I hope.

What's the maximum I should hold/invest in a single fund/IT? This is terms of money not percentage of a portfolio. This is in line with money safety.

Also, if I am investing in say two funds/ITs with the same company (I will use Vanguard as an example but it could be any) will it (sort of) halve the amount of money I invest in each fund so that the total is a maximum I should invest?

Thanks.
Robie

Linton

Safety from what? If you are talking about risks covered by the FSCS then what is covered is straightforward. ITs are not covered at all. UTs/Oeics are covered at the fund manager company level to £50K, no matter how many funds you hold from that company.

Whether that should affect how you invest is up to you. For my investing it is irrelevant as I don’t see the risks as being of any significance whatsoever if one confines oneself to mainstream regulated companies.

Robie

Linton wrote: »

Safety from what? If you are talking about risks covered by the FSCS then what is covered is straightforward. ITs are not covered at all. UTs/Oeics are covered at the fund manager company level to £50K, no matter how many funds you hold from that company.

Whether that should affect how you invest is up to you. For my investing it is irrelevant as I don’t see the risks as being of any significance whatsoever if one confines oneself to mainstream regulated companies.

Thank you Linton, that makes sense now.

Audaxer

Linton wrote: »

For my investing it is irrelevant as I don’t see the risks as being of any significance whatsoever if one confines oneself to mainstream regulated companies.

I certainly hope that would be the case, but I have a nagging doubt that even with a large mainstream regulated company, there is a possibility something could happen like a major fraud that could affect your investment. So I'm a bit reluctant to put more than £50k in one fund house.

bigadaj

Audaxer wrote: »

I certainly hope that would be the case, but I have a nagging doubt that even with a large mainstream regulated company, there is a possibility something could happen like a major fraud that could affect your investment. So I'm a bit reluctant to put more than £50k in one fund house.

Hopefully that will change over time as the indication is that £50k is a significant portion of your investable wealth. Once you get to high six or seven figures then depending on your investing strategy it may be much easier to hold in excess of £50k in one or more funds, or indeed fund houses.

Linton

Audaxer wrote: »

I certainly hope that would be the case, but I have a nagging doubt that even with a large mainstream regulated company, there is a possibility something could happen like a major fraud that could affect your investment. So I'm a bit reluctant to put more than £50k in one fund house.

Dont forget that FSCS protection would only apply if the fund management company was unable to cover the losses. So we arent talking about a rogue employee pinching the odd cheque. To bring down a major fund management company (Vanguard and Blackrock manage $Trillions and employ many 1000's of staff) it surely would need to be something systemic infecting the whole organisation. The !!!!! (sorry MSE I must spell it M a f i a) running a major fund management company may be a plot for a John Grisham novel but.....

However I suppose the key point is that each investor must feel comfortable with their investments. If you arent comfortable unless you have less than £50K with any particular fund manager then that's what you must do. Though were one to be investing £500K it could be a little restrictive.