Quilter S&S ISA - 7%

adindas

eskbanker said:

adindas said:

eskbanker said:

adindas said:

If I were you I would wait until they break even before taking another action and decide where I wanted to put the money.

Waiting until break-even is pretty arbitrary and would often be seen as an example of the sunk cost fallacy, i.e. a more logical approach would typically be to review the situation now to determine if this investment is still suitable for OP's objectives, risk tolerance, etc, rather than speculating about its short term direction.

That is why I said "Depending on what you invest". But looking into the OP case, losing -7% within five years, while other investors have lost much more than that is not bad investment. 

A good investor already has a thesis when they started selecting their investment and will review their thesis when they want to take a further action.

I am not provoking you need to keep your money tied blindly especially when there is high possibility you will lose much more ore even get liquidated, get de-listed. But with only -7% in the OP case this is hardly the case.

Yes, the middle point is what I was getting at - if OP has reached the point where they wish to review their investment (as they implicitly have in starting this thread) then now is the time to consider if any action is necessary, rather than setting an essentially arbitrary performance target of returning to original value before doing so.

I could easily see that a definitive loss of 7% of your money is entirely different when it is still a probability where there is a higher probability of recovering that. 
Pointless debate.

It is the same with the debate about 1.5 years ago get cheering up by the same group of people here on MSE

- DCA vs Lumpsum, or

- Bond vs Equity for those whose aim is to maximise retun, not for future secure cash flow generation

See how many people here in MSE still believe in throwing Lumpsum in the bear market ? People could easily see from the post in MSEs that majority of people are now doing DCAs.
How many people complaining about losing their money invested too much in Bonds while in the past this post getting cheering up from again the same group of people. How many people have lost their money looking into various posts ??
Investing Lumpsum in the bear market, too much bonds is the things I have warned people since about 18 months ago.

eskbanker

adindas said:
Pointless debate.

Indeed - like so many others, the last thing this thread needs is yet another edition of adindas buzzword bingo, featuring all the old favourites, that are completely irrelevant to OP, so please try to stay on topic!

SJG1962

eskbanker said:

That really isn't a 'disaster', in the context of the inherent volatility of investments, but what have you actually invested in (i.e. specific products within that wrapper) and over what timescale did you anticipate holding them (i.e. when are you likely to use the money)?

We knew there is risk with any investment. We worked with a financial advisor, who suggested the Quilter s&s ISA with a risk score of 4 and widely diversified range of investment - I think it’s the Wealth Select 4, and early projections were approx 7% annual growth, so by now it might have been + 35%. But 5 years later there has been a loss of -7%. The question is should we accept that loss and close the ISA and instead open a fixed interest savings account, 5% rates now & tax free benefit of an ISA is irrelevant to us. At the moment there does not seem any prospect of the s&s ISA increasing in value.

Reg_Smeeton

SJG1962 said:

The question is should we accept that loss and close the ISA and instead open a fixed interest savings account, 5% rates now & tax free benefit of an ISA is irrelevant to us. At the moment there does not seem any prospect of the s&s ISA increasing in value.

If you switch to cash you are locking in your loss and accepting a negative return in the near term as well (when factoring in inflation). I wouldn’t do it.

masonic

SJG1962 said:

eskbanker said:

That really isn't a 'disaster', in the context of the inherent volatility of investments, but what have you actually invested in (i.e. specific products within that wrapper) and over what timescale did you anticipate holding them (i.e. when are you likely to use the money)?

We knew there is risk with any investment. We worked with a financial advisor, who suggested the Quilter s&s ISA with a risk score of 4 and widely diversified range of investment - I think it’s the Wealth Select 4, and early projections were approx 7% annual growth, so by now it might have been + 35%. But 5 years later there has been a loss of -7%. The question is should we accept that loss and close the ISA and instead open a fixed interest savings account, 5% rates now & tax free benefit of an ISA is irrelevant to us.

I think you are overinterpreting the projected return. The FCA requires that such projections are on the basis of lower, intermediate and higher rate of investment return, so what you have is probably the intermediate or higher returns figure. The past few years have been anything but favourable for this type of investment, so not surprising it has not delivered on the more optimistic projections. Is this the fund you think you were put in? https://www.quilter.com/siteassets/documents/platform/wealthselect/factsheets/MM00958_WealthSelectManagedActive4.pdf

5 year return is showing as 16.6%, which is not 7% annual growth, but it could have been worse! It would have beaten cash over that period.

SJG1962 said:

At the moment there does not seem any prospect of the s&s ISA increasing in value.

What makes you say that? History seems to disagree with your view.

boingy

Reg_Smeeton said:

SJG1962 said:

The question is should we accept that loss and close the ISA and instead open a fixed interest savings account, 5% rates now & tax free benefit of an ISA is irrelevant to us. At the moment there does not seem any prospect of the s&s ISA increasing in value.

If you switch to cash you are locking in your loss and accepting a negative return in the near term as well (when factoring in inflation). I wouldn’t do it.

Talking about "Locking in your loss" is a very emotional way to approach investing. Just because a fund has performed badly over five years doesn't mean it is going to automatically recover and more in the next five years. In fact, underperforming funds often continue to under perform, either because of poor management or excessive fees, or both.. Maybe it will make some gains in the next few years but there is almost certainly another fund that will outperform it.

Most of the Wealth Select 4 funds at Quilter look to have done OK over the last five years so I'm wondering if there are charges or commission that have dragged the ISA performance down. I think those funds are only available via financial advisors, which is always a red flag to me.

dunstonh

We knew there is risk with any investment. We worked with a financial advisor, who suggested the Quilter s&s ISA with a risk score of 4 and widely diversified range of investment - I think it’s the Wealth Select 4, 

Wealth select is usually used by Quitler's in-house salesforce.  i.e. A quilter rep recommended a quilter S&S ISA using a quilter investment fund.

, and early projections were approx 7% annual growth, so by now it might have been + 35%.

That isn't how investments work.  You do not get straight-line growth.   

At the moment there does not seem any prospect of the s&s ISA increasing in value.

Why do you think that?  Do you have some inside knowlege that suggests hundreds of years of history is wrong?

Most of the Wealth Select 4 funds at Quilter look to have done OK over the last five years so I'm wondering if there are charges or commission that have dragged the ISA performance down. 

There is no commission. Hasnt been on new business since the end of 2012.

 I think those funds are only available via financial advisors, which is always a red flag to me.

They are available to IFAs and DIY investors using Quilter as well as their FAs.   However, I doubt many IFAs or DIY investors would use them.    However, saying that, just look at how many HL investors using the HL own branded funds.

InvesterJones

Would you invest in the fund now that it's at a 7% discount compared to the price 5 years ago?

Presumably the answer is yes, since you were willing to invest in it when it was more expensive. Unless something else has changed which affects your investment strategy, in which case, absolutely worth looking what meets your needs now.

EthicsGradient

@SJG1962, it is hard to see where the 7% loss has come from - the other "WealthSelect" fund with risk level 4 that they've been running for over 5 years is the "Managed Blend" one, which has had very similar performance (MM00966_WealthSelectManagedBlend4.pdf (quilter.com)) to the one masonic linked to (+16.8% over 5 years, compared to +16.6%).

It's not clear if you invested just a lump sum back in 2018, or if you've been adding to it since, but you should still be ahead with the latter as well (the only time when the price has been higher than now is the second half of 2021). How did you arrive at the "loss of 7%" figure?

SJG1962

InvesterJones said:

Would you invest in the fund now that it's at a 7% discount compared to the price 5 years ago?

Presumably the answer is yes, since you were willing to invest in it when it was more expensive. Unless something else has changed which affects your investment strategy, in which case, absolutely worth looking what meets your needs now.

If I could see performance over last 5 years had been -7.58% I would not make the same investment