Savings Advice- where am i going wrong

hollowaykid

I have had a virgin isa/pep since oct 98 putting in £60 a month and it is currently worth under £5,000 a little less than I have paid in. Why such a poor return after 7 years. Should I cash it and reinvest in another ISA?

nrsql

You don't cash it in - if you do you lose the isa status and can't put it into another one, apart from the current years allowance. Although maybe you could do that with this balance. Transfer the isa to another provider if you wish.

As for the return - there have been a few bad years and the markets have only recovered in the last coiuple. Bit surprised that you're not showing a slight profit but...

Whether to move is your decision. Have a look at the performance of other funds (and cash) and see if you think you can do better. Any advice on this matter would only be an opinion but you might want to think about paying into a different fund to diversify - then you can have the fun of comparing there performance.

jimclark1967

hollowaykid wrote:

I have had a virgin isa/pep since oct 98 putting in £60 a month and it is currently worth under £5,000 a little less than I have paid in. Why such a poor return after 7 years. Should I cash it and reinvest in another ISA?

Afraid it's a case of "the value of your investment can go down as well as up." A crystal ball is the only way to avoid this :mad:

littlereddevil

Mine is down £700 plus loss of any interest i would have got[this is on £3000]

I am seriously considering taking it out and putting it somewhere safe.Should i just cut my losses or would you hang in there??I can't really afford to lose it all!

Dave_The_Rave_2

Might I suggest moving it over to a bond. Being a bond, it will be significantly more stable than stock market funds (they're basically IOU's from big corporate companies and governments, so less risky).

One that I've found to be excellent is Invesco Perpetual Monthly Income Plus. You can have it paying income every month (at a whopping 6.95% ), and the price should rise also over the years, albeit a few percent here and there.

Speak to Hargreaves Lansdown, who will help you transfer your ISA, and keep the costs and annual charges to an absolute minimum, and provide a loyalty bonus, just for being with them.

Pheno

hollowaykid wrote:

I have had a virgin isa/pep since oct 98 putting in £60 a month and it is currently worth under £5,000 a little less than I have paid in. Why such a poor return after 7 years. Should I cash it and reinvest in another ISA?

That ISA probably tracks the stock market. You were paying in when the market was at its peak and in 2001 it crashed. It has since recovered a bit which is why you are breaking even. It could be worse - if you'd checked out how much it was worth 2 years ago you would have been very depressed! Here's a graph of the FTSE:

http://uk.finance.yahoo.com/q/bc?s=^FTSE&t=my&l=off&z=m&q=l&c=

sneekymum

Invesco Perpetual Monthly Income Plus's 2005 figures aren't that special.

ReportInvestor

Branson sold the Virgin Tracker on his personality but the charges were higher than many other trackers.

Tracker funds have done less well over seven years, on average, than actively managed UK funds. This was after a period when the trackers dominated. In fact I think Branson may have made a public bet on his fund v managed funds which he will have lost.

This is because the mid-cap stocks have recently beaten the FTSE 100 out of sight, and the FTSE 100 is in any case weighted heavily towards the top ten companies (this makes it a far riskier fund than many imagine). As a result you have been dispoportionately hurt by the poor performance of Vodaphone & Glaxo, among others. Your fund is overweight in banks, telecoms and drugs.

However some commentators have suggested that 2005 may be the time to have another look at the larger capitalised stocks, so things could be looking up for you if you stick.

L&G, among others, have an All Share Tracker with lower charges than Branson's baby.

Other companies are examining trackers that would limit the amount of the fund in any one company to, say, 5%.

carnet

sneekymum wrote:

Invesco Perpetual Monthly Income Plus's 2005 figures aren't that special.

Yes, the two Pauls (Causer & Read) seem to have gone off the boil in recent times and, IMHO, there are many other funds with much better prospects.

Personally, I would think about a good Distribution Fund from a quality investment house, which pays interest rather than dividends ie has resolved to keep at least 60% of its assets in bonds/fixed income and can therefore reclaim the 20% tax within an ISA.

The minority equity element should, over the medium to long term, enable the fund to deliver better results than a purely Fixed Income fund.

As ever, not investment advice.

hollowaykid

Can anyone recommend an IFA?