Isa stock n share..vanguard v pru

Chapter73

Good afternoon

I wish to try a stocks and shares isa for the first time ever this year.
I want it in for about 7 years
I am a cautious old soul and have been looking at the vanguard 80/20 cash/gilt isa and a Prudential one.
Is there anyone who has any experience of such isa’s please?
I thank you

dunstonh

I am a cautious old soul and have been looking at the vanguard 80/20 cash/gilt isa and a Prudential one.

I am going to assume you mean VLS20 rather than VLS80. And Prufund rather than any other of their funds.

Is there anyone who has any experience of such isa’s please?

yes.

Apart from that, you havent added any other questions. So, I will ad lib.

VLS is returns focued and not risk targetted. This tends to make it better a good option at the high risk end but weaker at the low risk end. There are better alternatives at the low risk end.

Prufund is a niche option and quite good for the lower risk end but you pay for those protections in increased charges. And if you spend a bit of time learning about investments, you may find paying extra for those protections is not worth it.

Oxonboy

I must be the uneducated investor with a lazy IFA!

I quite like the Prufund GrowthFund as a long term home for consolidating my DC pots and putting them into drawdown, albeit I'll only be taking cash free tax out periodically in the short-medium term.

It's not promising stellar performance but according to the stats I've pulled from Financial Express annualised performance for the 10 years to end of Feb 2019 was 8% and the smoothing built into the fund meant a lot less volatility over that period than more conventional funds.

Current Expected Growth Rate is 6.2% but EGR has been on a downward trend since 2008 and returns for the current version of the fund has been 5.5% for the last couple of years (compared to negative returns on just about all my other funds over the last 12 months) net of platform fees (0.79%) but gross of product fees (0.3% for the amount I'm looking to invest).

So, for a return of something of the order of 5% I hope get a diversified, managed, low maintenance fund with low volatility.

I won't need my IFA to advise on an ongoing basis so I save his 0.5% fee and pay only 1.09% overall. I could do better but I don't want to be an active investor fretting over my funds and worrying about timing for withdrawals to avoid market drops.

I have some reservations about the Prufunds Cautious and Growth Funds:

- You can only access them via a FA/IFA so you have to pay their fees for advice and Pru refuse to talk to you about the fund if you have questions before opening an account. It all has to be routed through the FA/IFA. To be fair the Growth Fund wasn't one of the funds I had considered before the advice.

-While the asset allocation is shown in the fund information by class and geography I couldn’t find any way of drilling down to see the underlying holdings. Nor could I find any statement as to the quality of the investments, particularly the investments in bonds and property.

- The fund isn’t traded and the unsmoothed unit prices aren’t published (leaving them open to manipulation buy Pru??) and while the smoothing process is formulaic Pru reserves the right to suspend it and reset the smoothed price.

- The fund has a bias towards UK assets, particularly UK equities (although reduced since last year) that make it a bit more vulnerable to post Brexit turbulence over the short-term. I noticed the Aviva Smoothed Managed fund takes a different approach with a large exposure to overseas equities, although this fund is too young for me to consider at the moment.