Investment Trust in ISA

marahouti · 22 August 2019 at 2:46PM

I hope someone can offer me an opinion on including an Investment Trust in my S&S ISA. My ISA with A J Bell currently contains 4 passive funds, V . L 40 and 60 and A J Bell Balanced and Moderately Adventurous. I read an article online recently in which the writer was praising Investment Trusts and said that every ISA should include ITs to add diversity. I have a cash ISA that has recently matured and am in the process of transferring the proceeds to my S&S ISA. I had thought I would divide it up between my passive funds as soon as the cash arrives in my account. However, I am now thinking that I should buy shares in an IT with part of the money; with Brexit coming (or not) diversity must be a good thing. Which leads me to my next question, assuming it's a good idea, how on earth do I pick one? I am 63 and do not anticipate needing the money in my ISA for 10 - 15 years, probably longer. Thank you for reading.

ColdIron · 22 August 2019 at 3:06PM

An investment trust is simply a structure that can contain investments. Your funds are a different type of structure. It's not the structure that matters so much as what they contain. Think of them as shopping baskets. There are many attractive features of ITs but diversity isn't one of them any more than a steel shopping basket can contain more diverse food than a plastic one. I would stick with what you have

marahouti · 22 August 2019 at 4:48PM

Thank you coldiron for taking the time to reply. Your analogy of shopping baskets makes it much easier to understand. I think I'm going to stick with the funds I have, I don't want to complicate things just for the sake of doing something different.

Alexland · 22 August 2019 at 6:51PM

Yes agree with the above if you want a diverse global IT then something like Bankers might be of interest however you might as well just buy a global ETF or fund such as VWRL or HSBC FTSE All World. Still all of these are 100% equities and if your investments are currently mid-risk they would be much more volatile.

I am unsure why you need those 4 funds in your ISA when one good one would do such as VLS60 or HSBC Global Strategy Balanced. No point wasting those £1.50 fund trade fees.

Alex

marahouti · 23 August 2019 at 8:32PM

Thank you Alexland. The truth is I did start off with just one, VLS60, when I opened my first S&S ISA about three years ago when I was 60 (I know, shamefully late). I then thought that since I was 'knocking on' a bit I should buy VLS40 with my next lump sum to average 50/50 shares and bonds, it seemed to make sense at the time. Then A J Bell wrote to me to say that they were bringing out their own passive funds so I bought the Balanced and, since I consider myself quite adventurous but not very in general life, a smaller amount of Moderately Adventurous. When the transferred cash ISA arrives in my A J Bell account I may leave it in cash for a little while while I decide what to do. Thank you again for taking the time to comment.

Alexland · 23 August 2019 at 8:39PM

So what you currently have is more a reflection of the journey than what you might need going forward? If you don't need access to the money for 10+ years but are still slightly cautious then I don't see why you wouldn't just go VLS60. You might have got it right first time.

For a S&S ISA that would be cheaper to hold on Vanguard Investor than AJ Bell YouInvest as the platform fee is 0.10% lower and there are no fund trade fees.

If it's a large amount or you trade very infrequently consider iWeb.

Alex

Investment Trust in ISA

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free