Does the fund choice affect the demutualisation payout?

EdInvestor

Bootman,

Five years ago I was in much the same position as you. I ran into an old friend of my father's who reminded me that back in the old days, nobody had to deal with all this baffling fund stuff.

"Just put your money into some good household name shares that pay decent dividends," he said, "and when the dividend money comes in, use it to buy more shares."

I must say this struck me as sensible. Apart from anything else, it's effectively cost-free.:)

I followed this advice myself and it proved to be wise.

If you want to do it at Standard Life, you'll have to move your fund into their SIPP.I do suggest you closely inspect the charges for this.Assume you'll be buying about 15 shares @ say 2k each, for your 40k fund, with the extra 10k gouing into something else.

How old are you, BTW?

dunstonh

Ed, you are telling someone that is not confident in selecting funds themselves to go into a SIPP. That is just crazy and inappropriate.

EdInvestor

DH,

I am not telling anyone anything.If you think he should stay in funds, then why don't you try demystifying them for him a bit? Bootman is trying to learn.

If the system is so confusing, can you blame people for deserting it en masse and investing in cheap trackers, or DIY High Yield Portfolios? At least they can avoid the high charges.You are just telling him to go and incur more charges.It's not helpful IMHO.


Here's a typical article explaining what I mean

dunstonh

If you think he should stay in funds, then why don't you try demystifying them for him a bit? Bootman is trying to learn.

Recommending funds is advice and I would be in breach of board rules and, more importantly, FSA rules if I gave that advice out on the forum.

There have been quite a few forum members that have taken it to PM with me and I have then given them advice after ascertaining their risk attitue correctly and giving full disclosure (i.e. IDD & terms of business issued and a written explanation of the advice given and the limited instruction and then completion of the required forms).

That article you post is foolish. It encourages single fund investment which I know you are against the same as the rest of us (it does mention dont put all your eggs in one basket but that is added as an afterthought to the main piece). Managed funds cover all risk areas and some have significantly outperformed UK trackers and some have performed less. The low risk funds would have performed less as its been a year, where on the whole the riskier the sector, the higher the growth (USA being exception).

Also it is totally foolish to look over 1 year when investing. Look at examples over longer periods. Income re-invested. £100 invested bid to bid pricing.

10 years

L&G UK Stockmarket Tracker: £167.35
Barclarys FTSE100 Tracker: £195.84
Liontrust First Income : £359.65
UK Equity Income Sector Avg : £221.78

5 Years

L&G UK Stockmarket Tracker: £86.01
Barclarys FTSE100 Tracker: £83.81
Liontrust First Income : £169.12
UK Equity Income Sector Avg : £109.16

So, in both 5 year and 10 year periods, the UK equity income sector average managed to beat UK trackers let alone some of the better brands giving even better performance.

Trackers are good when things go up. They will usually beat equivalant managed funds during that period. They have no downside protection and the lack of active management works in their favour going up. It does, however, work against them in poor periods of performance.

When i build portfolios, i do more often than not put a tracker in the pot. It will not be their in isolation though.

Pal

This thread is riddled with financial advice, which I have tried to remove. The recommendation of specific funds is against site rules, not to say FSA regulations. In this case I have edited the posts. If any similar cases arise in the future I will simply delete the offending posts, and will request to the site moderators that the offending posters are banned.

I know that everyone is simply trying to be helpful, and I would also like to be able to help people out with "guidance" on fund choices. Unfortunately we can't.

If anyone wants to go to a website to discuss individual funds (or even stocks) then please feel free to post at Motleyfool.co.uk, where there are plenty of people willing to misinform others of their misguided opinions.

With apologies to NickC and Bootman, this thread is closed.