Portfolio Unitisation Question

I don't understand your problem...

In scenario 2 you would be left with 95 units.

If the market fell by 10%, scenario 1 units would fall by 9.5% whereas scenario 2 units would fall by 10%. The % numbers would be the same if the markets rose. So withdrawing the cash would make the portfolio more volatile, outperforming in the good times and underperforming in the bad.

If you look at in cash value terms of say £10k, in both scenarios you have £9,500 in equities and £500 in cash, just that in scenario 2 the cash is outside the S&S ISA. So a 10% increase or decrease in equities in both scenarios would have the same effect. The only difference would be you could be earning some additional interest in scenario 2 when the cash is outside the ISA.

george4064 wrote: »

Im comparing the performance per unit.

My conundrum is that I want to make use of the cash sitting in my S&S ISA, but I dont want to invest it. So Im trying to ascertain the impact on the portfolio performance if I remove it (thus redeeming some units) or if I leave it in there.

[FONT=&quot]You get to decide what constitutes your portfolio, so if you withdraw cash from an S&S ISA and put it in an account where it earns interest, you don’t have to take it out of your portfolio for unitisation purposes; you are just relocating your cash. As your cash earns interest, you can add that interest to the value of your portfolio. If at some point you want to use that cash to buy investments, you can transfer it back to the S&S ISA but the number of units won’t change. If you withdraw the cash and buy something, then you will have to reduce the number of units in your portfolio.[/FONT]