Nationwide Fund

thrupence

Hi everyone,

I've had a small ISA portfolio drawn up by a Nationwide financial advisor since October last year. It's now run by Legal & General, and comprises: UK Growth acc, FTSE Tracker acc and the Balanced fund acc. I put a lump sum of £1400, £1400 and £800 respectively in the fund and am paying in £200 per month to be distributed in the same proportions. So I've committed £4600 so far, losing anything between £600 and £1000 these past 6 months. I know, I bought at the top of the market.:mad:

The question is, is it worth sticking with these funds? Are they in any way worthwhile for the long term or would I be better off cashing in, taking the loss and taking an interest in creating my own portfolio through a fund supermarket? Or would I be better to leave those funds as they are and stop paying into them but create a new S&S portfolio from 2008/9 onwards? I'm already maxed out on the Cash ISA for this year and will be for next.

Thanks for any help with this

jem16

Your main problem has been to go to a bank for investment advice. As you now know their products are very limited and also expensive.

If you had seen an IFA you would have been put into a proper portfolio of funds and not Nationwide's bog standard funds.

You have two choices.

1. If you are happy to go DIY transfer your ISA to Hargreaves & Lansdown. Don't just withdraw or you lose the ISA status. You will have to choose the funds yourself though.

2. If you need advice go and see an IFA who can do the transfer for you and switch you into funds according to your risk profile.

thrupence

Thanks for that.

I'm toying with the idea of just leaving those funds as they are for the long term but stop paying any more into them, and just starting again for 2008/9 with your suggestion.

The only thing is if I don't cancel the Direct debit quickly I'll be contributing for next year and won't be able to setup a new S&S ISA for 2008/9.

dunstonh

I'm toying with the idea of just leaving those funds as they are for the long term but stop paying any more into them, and just starting again for 2008/9 with your suggestion.

Why not switch the funds you have and treat the investment with respect rather than hoping Nationwide's choice may come right. It doesnt need to cost you a penny to sort it out and you wont need to lose your ISA status.

jem16

thrupence wrote: »

Thanks for that.

I'm toying with the idea of just leaving those funds as they are for the long term but stop paying any more into them, and just starting again for 2008/9 with your suggestion.

I think you would be better transferring them. According to Trustnet their rankings according to their sector are;

UK Growth - 160/358
Balanced - 78/155
Tracker - 213/358

I'd be looking for better performance.

thrupence

dunstonh wrote: »

Why not switch the funds you have and treat the investment with respect rather than hoping Nationwide's choice may come right. It doesnt need to cost you a penny to sort it out and you wont need to lose your ISA status.

When I switch do I need to choose and buy new funds immediately, paid for out of what the Nationwide funds are now worth?

Is that the way it works?

jem16

thrupence wrote: »

When I switch do I need to choose and buy new funds immediately, paid for out of what the Nationwide funds are now worth?

Is that the way it works?

Have a look here for some information on transferring if you plan to go DIY.


http://www.h-l.co.uk/our_services/isa_transfers.hl

thrupence

Thanks Jem,

I'm looking through that at the moment.

The other problem is that with my £3600 initial investment and £200 per month for the past 5 months, I've now contributed £600 above my mini S&S allowance for 2007/8. The Nationwide financial advisor said that he would manage the dripping in of surplus monies as appropriate. But the thing at the moment I suppose is that the extra £600 is outside the ISA wrapper waiting for the new tax year, so maybe I have to talk to the Nationwide bloke before I do any transferring to address that complication. But if he drips money in after April 5th 2008 will I be committed to only that ISA for the rest of the year? I'm also concerned to stop my Direct Debits for the same reason. I don't want to contribute for the 2008/9 year in case that means I can't open my own DIY version during 2008/9.

I'm quite taken with the DIY approach. It's a bit boring just reading the fund prices and seeing them go down and down when you know that in the good times the funds you're in probably won't be much of a performer even then. Much better to risk it in emerging markets in a hands on way. At least it would be more fun.

jem16

thrupence wrote: »

Thanks Jem,
But if he drips money in after April 5th 2008 will I be committed to only that ISA for the rest of the year?

No you could still transfer if you wanted.

I'm quite taken with the DIY approach. It's a bit boring just reading the fund prices and seeing them go down and down when you know that in the good times the funds you're in probably won't be much of a performer even then. Much better to risk it in emerging markets in a hands on way. At least it would be more fun.

As long as you don't mind the possibility of losing 60% as well.