fire and forget 'low risk' fund

Mistermeaner

hi

I understand from other postings that while things like vanguard LS 100/80 and L&G multi 6/7 are good 'fire and forget' type funds for the hands off investor at the higher end of risk that their equivalent lower risk funds (e.g. VLS 20 / L&G multi 1) are not as well thought of

Can anyone advise some potential low risk funds for consideration

Investment horizon is 1-5 years, with possible cash in at short notice any point after a year

Target is to beat the 1-1.5% available in cash ISA

Sum is 200K+ and simplicity and hands off required so no recycling through multiple cash accounts etc.

Funds currently in ISA wrapper but don;t have to stay there

ColdIron

Mistermeaner wrote: »

Investment horizon is 1-5 years, with possible cash in at short notice any point after a year

This is not a suitable time frame to invest, you could get back less than you put in. You need a plan B and it should involve cash

Thrugelmir

Mistermeaner wrote: »

Investment horizon is 1-5 years, with possible cash in at short notice any point after a year

Markets are volatile. Not the place to invest in the short term if capital value is to be maintained.

AnotherJoe

Another vote for "no investments, savings instead".
You can get about 2% for a year . Is this earmarked for something like a house purchase?

Mistermeaner

It's my dad's savings ; he has 2 x DB pensions + a surviving spouse pension , he's in his 80s

Wanted something safe and simple but better than cash....

Was looking at ns and I for security but rates are horrible

bowlhead99

Mistermeaner wrote: »

It's my dad's savings ; he has 2 x DB pensions + a surviving spouse pension , he's in his 80s

Wanted something safe and simple but better than cash....

Was looking at ns and I for security but rates are horrible

There is nothing as safe as cash or NSandI deposits with better rates than cash or NSandI.

There are riskier things than cash, with potentially better investment returns but they all have risk of investment losses.

Sum is 200K+ and simplicity and hands off required

Investment horizon is 1-5 years, with possible cash in at short notice any point after a year

What is he suddenly going to need all £200k+ for at short notice after a year? Is he wondering whether to buy a new Lamborghini for his 85th? Do you take frequent package delivery trips to South America and he fears he might need a few hundred grand at short notice to pay the ransom to a drug cartel?

Sometimes when you properly evaluate spending requirements, you realise that an 80 year old with multiple sources of guaranteed pension income will not actually need over two hundred grand at short notice, and even if his situation changed to need to utilise the money to fund an income shortfall for later-life care costs, the time horizon to burn through the last of the few hundred thousand pounds would be several years away.

Maybe he is looking to make gifts to his kids over the coming years. Would the kids not be willing to inherit investments, only cold hard cash?

You said £200k+ but not how much beyond £200k. If you want the certainty of cash but don't like the rates at NS&I, you have to use banks and building societies, and the compensation limit is £85k so means using multiple institutions.

Let's say the figure is £240k.

£80k in 1 year fixed term cash ISA at Shawbrook, 1.77%

£80k in 2 year fixed term cash ISA at Kent Reliance, 1.90% ; if there is some emergency where he really does need the money shortly beyond 1 year from now, he can access it early with a penalty equal to 180 days interest. But if he thinks the chance of that practically happening is remote, might as well go for the longer fix to get higher interest. They actually have a 5 year ISA paying 2.3% but the penalty for early access is a whole year's interest which is quite steep.

£80k in S&S ISA invested in L&G Multi Index 4 fund
It isn't really suited to an 'any time after 1 year' time horizon but that is the problem with any investment fund we could mention. By making it be only a third of the money you reduce the risk of actually needing to cash it in during an unfortunate time in the economic cycle. I am just guessing he would be willing to defer his Lambo purchase if the markets were in the doldrums. Or perhaps they would be available at a discount, as the showroom queues shorten in a market crash.

Personally I would split the S&S ISA across multiple funds / investment trusts but have not bothered to list multiple funds because you have already expressed a preference for simplicity and hands-off, and you shouldn't be using investments for a '1-5 year' goal anyway so I don't want to encourage bad behaviour.