Increase money in existing fund or open another one?

Grampy_Rabbit

Hello 
I would be very grateful of some advice. I have 16k in a HSBC global fund ISA. I would like to invest some more money into a stocks and shares ISA. Does it make sense to put more money into the HSBC ISA or would you open another fund to do this? I have read online that you should diversify, so I wasn't sure if that meant that you should have lots of different funds? 
Is there any easy guides online of how to choose funds? I'm a FT working mum so don't have much time to look into these things!
Thanks for any advice 

eskbanker

You're mixing terminology a bit - the ISA is just a wrapper, within which you can hold whatever mixture of funds you wish, so there's no need to use a different ISA to diversify, but within it you can buy into other funds.  In general terms, diversification entails spreading investment across multiple sectors, geographies, etc, so if you already have a global fund then it may not be necessary to diversify beyond that and just buy more units of it instead - what's the exact name of the fund and how did you choose it in the first place?  When would you anticipate needing the money and what's your attitude to risk?

Albermarle

 I would like to invest some more money into a stocks and shares ISA. 

What drove the decision to invest more in a S&S ISA, often a pension is a better place to invest due to the tax breaks;

When you answer Eskbanker's questions, can you also outline your current pension situation?

Grampy_Rabbit

Hello 
Thank you very much for your replies. Its HSBC Global Strategy Balanced Portfolio. I chose it because I had a bank account with HSBC already so it was easy to open. I think I would say I'm middle of the road with the attitude to risk which is why I went with 'balanced'! 

I shouldn't need the money in the short-term but also not sure I want to lock it into a pension. I do have a pension with my employer and we both contribute quite a high % but I do need to do some work to check whether it will be sufficient as I've had some gaps in contributions. 

If it is, would you put in any additional money into the existing HSBC fund I have already? 
Thanks for your help.

eskbanker

If you have £16K in HSBC Global Strategy Balanced and are looking to invest an additional sum, then buying more units of the same fund is probably sensible - it's a decent low-cost diversified multi-asset fund and any benefits from buying into a different fund would be marginal unless you had a strong sense of something specific you were trying to achieve by doing so....

Grampy_Rabbit

Great, thank you very much. That's very helpful. I also would like to transfer some money into it from a Cash ISA. Is there a guide / rule of thumb as to the the total amount you would have in the same fund before thinking its better to invest some of the money into another one? 

Albermarle

Grampy_Rabbit said:

Great, thank you very much. That's very helpful. I also would like to transfer some money into it from a Cash ISA. Is there a guide / rule of thumb as to the the total amount you would have in the same fund before thinking its better to invest some of the money into another one? 

No rule of thumb. The point is that the fund you have is already widely diversified, so not much point adding a new one. These low cost multi asset funds are fine for smaller, less experienced investors. 

Suggest that it is more important to make sure you also fully understand how your pension is invested. As it is a long term investment ( not sure of your age though) it is probably better to take a bit more risk, as this should hopefully produce more growth over a long period. Feel free to come back and ask questions about your pension investment later if you wish.

Grampy_Rabbit

Thanks Albermarle, I think you are right as I don't really understand much about my pension. I will post another message on pensions board.