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Seeking a little advice on my ISA

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
Marky72
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Seeking a little advice on my ISA

#393822

Postby Marky72 » March 9th, 2021, 10:32 am

Hi guys,

I am new to this forum and fairly new to investing. I have watched a lot of videos on YouTube and read through lots of posts in different threads on this site which has made very interesting reading. Conversely, it has also confused me a little as to what “could be” suggested as a good strategy for moving forwards with my portfolio.
My portfolio currently is with HL and consists of:

• Vanguard FTSE Developed World ex-Uk Equity Fund (accumulation) – only recently opened with approx. £300
• Legal and General International Index Trust (accumulation) - only recently opened with approx. £300
Shares/equities
• AV shares = 50%
• IAG = 4%
• VMUK = 6%
• LLOY = 5%
• VOD = 3%
• TW = 3%
• BARC = 16%

I am looking to add to and diversify my portfolio and have been scouring the posts on this site and would really appreciate any advice (obviously I understand that nobody can predict the future)
My situation is that I am 50 years old and am aiming to retire in 6/7 years and have a defined, final salary pension. I want to beat the really dire interest rates being offered by banks and invest using my ISA allowance each year (although it won’t be the full 20k!) I would like to
My tolerance to risk hovers around the medium/low-medium area and I would be leaving the money invested for approximately 10 years or maybe more. I don’t need to necessarily have an income from my investments.

Below are some funds/trusts etc. that caught my attention but not sure if they would be :
• Vanguard FTSE Global All Cap Index (accumulation)
• EMQQ Em markets Internet and Commerce Ucits ETF
• Scottish Mortgage Investment Trust PLC – I know this has declined a lot recently
• Fundsmith Equity Class I Income (GBP)
• Alliance Trust plc (ATST)

Through my reading I have learned that, in general, Investment Trusts outperform funds over longer periods of time but would really love to hear what you guys would suggest/recommend? I am aware that Emerging Markets, Europe small CAP ETF’s, companies associated with energy/green products etc. may be worth looking in to? Warren Buffet has since reported that funds may not be the best investment to hold over the long term?
It would be really great if I could hear back from some of you more experienced investors with some suggestions of how I could diversify to set myself up a bit better for the future- including any recommendations of funds/trusts/trackers etc. that are working for you?

Many thanks,

Mark

dealtn
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Re: Seeking a little advice on my ISA

#393829

Postby dealtn » March 9th, 2021, 10:50 am

Marky72 wrote:
• AV shares = 50%
• IAG = 4%
• VMUK = 6%
• LLOY = 5%
• VOD = 3%
• TW = 3%
• BARC = 16%


My tolerance to risk hovers around the medium/low-medium area ...



50% in a single share doesn't match your stated risk tolerance.

Urbandreamer
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Re: Seeking a little advice on my ISA

#393831

Postby Urbandreamer » March 9th, 2021, 10:55 am

While I love* Scottish Mortgage, I wouldn't recomend it to someone who views themselves as a medium to low risk investor.

The managers have often advised investors to expect volatity. Consider Monks instead. It's run by the same firm and has some of the same investments, but should be less volitile.

*It's over 8% of my portfolio and 40% of my son's JISA.

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Re: Seeking a little advice on my ISA

#393858

Postby AleisterCrowley » March 9th, 2021, 12:12 pm

If you are unsure what'll happen in the future, a global tracker may be a good plan (VWRL or similar)
It's not 'low risk' of course, equities never are, so combine with fixed income

Mike88
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Re: Seeking a little advice on my ISA

#393864

Postby Mike88 » March 9th, 2021, 12:29 pm

I doubt whether there is such a thing as low to medium risk in equities or bonds at the moment.

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Re: Seeking a little advice on my ISA

#393928

Postby xeny » March 9th, 2021, 4:15 pm

If you're essentially saving for post retirement income, have you considered either AVCs or a SIPP for at least some of the money? potentially a better tax treatment.

I'd also suggest a global tracker combined with appropriate bonds to taste to reduce volatility is worthy of consideration.

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Re: Seeking a little advice on my ISA

#393984

Postby doug2500 » March 9th, 2021, 6:22 pm

Global tracker is fine but probably about 65% invested in the US, this isn't a problem in itself but might not match your view on risk.

Would you bottle it and sell if your tracker fell 30% in a few days (or maybe even one)? If you think the answers yes then maybe it's not for you, or only for a small proportion of your investments.

If the answers no then you could also look at JP Morgan Global Growth and Income Trust, JGGI It could be considered as an IT version of a global tracker. I said could before anyone gets too upset!! Performance is very similar but with better divi's.

A halfway house may be a defensive IT like Ruffer, Capital Gearing or Personal assets trust. Less volatile than most equity investments but better than cash.

Ultimately only you can know your risk tolerance, and maybe you'll have to learn it through hard experience. But well done for starting and try to think long term (5-10 years)

LooseCannon101
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Re: Seeking a little advice on my ISA

#393993

Postby LooseCannon101 » March 9th, 2021, 6:39 pm

I would recommend one or more global growth investment trusts e.g. Alliance, Witan or F&C. I've been investing in F&C for the past 20 years and achieved about 8% per year on average with dividends re-invested. I would say that a reasonable model of price performance has been that there is an equal chance each year of gaining 30% or losing 10%. I expect this to continue for the next 20 years.

10 years may be a reasonably long period of time for investing, but I prefer to think of 20 years +. Benjamin Graham (Warren Buffett's mentor) wrote a book called 'The Intelligent Investor' (highly recommended) in which he studied financial markets over 50 years.

Buying shares in a highly diversified trust like F&C every month for many years, re-investing dividends and occasionally topping up when the market is seriously depressed, should deliver very respectable returns. Discipline and patience are more important than investing knowledge.

Marky72
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Re: Seeking a little advice on my ISA

#394060

Postby Marky72 » March 9th, 2021, 9:04 pm

LooseCannon101 wrote:I would recommend one or more global growth investment trusts e.g. Alliance, Witan or F&C. I've been investing in F&C for the past 20 years and achieved about 8% per year on average with dividends re-invested. I would say that a reasonable model of price performance has been that there is an equal chance each year of gaining 30% or losing 10%. I expect this to continue for the next 20 years.

10 years may be a reasonably long period of time for investing, but I prefer to think of 20 years +. Benjamin Graham (Warren Buffett's mentor) wrote a book called 'The Intelligent Investor' (highly recommended) in which he studied financial markets over 50 years.

Buying shares in a highly diversified trust like F&C every month for many years, re-investing dividends and occasionally topping up when the market is seriously depressed, should deliver very respectable returns. Discipline and patience are more important than investing knowledge.
- Thank, would you consider purchasing say £8000 worth of shares in one go and then just leave it, ensuring that you re-invest the dividends?

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Re: Seeking a little advice on my ISA

#394091

Postby JohnW » March 9th, 2021, 10:00 pm

Marky72 wrote:Through my reading I have learned that, in general, Investment Trusts outperform funds over longer periods of time

Perhaps you can point to a reference where you've read this, just one for a start.

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Re: Seeking a little advice on my ISA

#394102

Postby Hariseldon58 » March 9th, 2021, 10:44 pm

@johnw

The comment about ITs outperforming funds is fairly common.

There is a degree of truth in the generalisation, firstly ITs often employ gearing, in the past they often were cheaper and because ITs have often traded at a discount this is a source of additional returns. ( you buy assets at a 10% discount but you would get dividends on the NAV )

ITs have other advantages, however Fund charges are probably pretty similar now and the simpler structure of a fund removes some elements of risk.

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Re: Seeking a little advice on my ISA

#394119

Postby scotia » March 9th, 2021, 11:49 pm

OK - I started many years ago saving in PEPs and ISAs with Hargreaves Lansdown. The maximum ISA yearly contribution was £7000, and I spread this out over 12 months at approximately £600 per month, which irons out the ups and downs of the market. I also believe in diversification, so I normally purchased two different lots of £300 per month. I concentrated the purchases on OEICs (Funds in HL parlance), so avoiding all purchase costs. Although there is now a 0.45% annual platform charge, this is still much cheaper than purchasing £600 in an Investment Trust - where the one-off purchase cost is £11.95 and the transfer stamp is 0.5%. Later in life, when you have accumulated a substantial sum, the 0.45% annual charge may seem large, so you could sell some of your OEICs, and re-invest a substantial sum in an IT - where the £11.95 will be insignificant.
So - back to which OEICs I am happy with.
For global growth I have held Fundsmith and Lindsell Train Global Equity (an offshore OEIC) for many years. For more exciting (and volatile) global growth I have held Baillie Gifford Global Discovery.
For UK growth I have held Liontrust UK Ethical, and Lindsell Train UK Equity. For UK Smaller Companies I hold Amati UK Smaller Companies.
There is a large choice of European OEICs, and I currently hold Threadneedle European Select (larger companies) and Barings Europe Select (smaller companies). Recently I have become impressed by the performance of Premier Miton European Opportunities (middle sized companies).
Hargreaves Lansdown have excellent tools to let you compare the performance of Funds - Select a Fund, and go for Charts and Performance.
The five year total return of the funds I have mentioned are:-
Fundsmith 126% , Lindsell Train Global Equity 117%, Baillie Gifford Global Discovery 234%
LionTrust UK Ethical 79%, Lindsell Train UK Equity 57%, Amati Smaller Companies 129%
Threadneedle European Select 75%, Barings Europe Select 82%, Premier Miton European Opps 176%
But remember - markets go up and down, and fashions change.

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Re: Seeking a little advice on my ISA

#394408

Postby LooseCannon101 » March 10th, 2021, 8:25 pm

Marky72 wrote:
LooseCannon101 wrote:I would recommend one or more global growth investment trusts e.g. Alliance, Witan or F&C. I've been investing in F&C for the past 20 years and achieved about 8% per year on average with dividends re-invested. I would say that a reasonable model of price performance has been that there is an equal chance each year of gaining 30% or losing 10%. I expect this to continue for the next 20 years.

10 years may be a reasonably long period of time for investing, but I prefer to think of 20 years +. Benjamin Graham (Warren Buffett's mentor) wrote a book called 'The Intelligent Investor' (highly recommended) in which he studied financial markets over 50 years.

Buying shares in a highly diversified trust like F&C every month for many years, re-investing dividends and occasionally topping up when the market is seriously depressed, should deliver very respectable returns. Discipline and patience are more important than investing knowledge.
- Thank, would you consider purchasing say £8000 worth of shares in one go and then just leave it, ensuring that you re-invest the dividends?


The simple answer is - Yes. If you are investing in a global growth investment trust over the long term e.g. 10 years+, it is usually (not always) better to invest in one go at the start and re-invest dividends thereafter. No re-balancing is needed.

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Re: Seeking a little advice on my ISA

#401414

Postby SPURLEY » April 3rd, 2021, 5:44 pm

Hello I am asking a bit of advice for a friend . She has been saving into a Share ISA for the past 20 years in a Royal London Platinum Plus ISA . She says her money has doubled over this time . I wonder if this has been worth it . I see that the account she pays into is not open to new customers and I wonder why . Can anybody say whether she ought to carry on investing with Royal London ? . Is it a good scheme ? .

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Re: Seeking a little advice on my ISA

#401438

Postby dealtn » April 3rd, 2021, 6:29 pm

270160 wrote:Hello I am asking a bit of advice for a friend . She has been saving into a Share ISA for the past 20 years in a Royal London Platinum Plus ISA . She says her money has doubled over this time . I wonder if this has been worth it . I see that the account she pays into is not open to new customers and I wonder why . Can anybody say whether she ought to carry on investing with Royal London ? . Is it a good scheme ? .


Not without knowing anything about her aims and risk appetite I wouldn't.

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Re: Seeking a little advice on my ISA

#401458

Postby Alaric » April 3rd, 2021, 6:59 pm

270160 wrote: She has been saving into a Share ISA for the past 20 years in a Royal London Platinum Plus ISA .


That's a "with profits" ISA, which were rare, only offered by a handful of Companies.

I found a webpage about it
https://www.royallondon.com/existing-cu ... -plus-isa/

From the context it looks as if the contract was originally issued by Cooperative Insurance.

What I failed to locate was a statement of current bonuses, terminal bonus or market value adjustment.

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Re: Seeking a little advice on my ISA

#401464

Postby SPURLEY » April 3rd, 2021, 7:15 pm

Thank you Alaric . Yes I think she started off with the CIS . I just wonder if there would be penalties if she decided to stop investing --- £25 a month , and has done so for the last 20 years . She has no pension and has no idea whether to increase her contributions or not . She is 41 , single . living with elderly parents .

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Re: Seeking a little advice on my ISA

#401465

Postby terminal7 » April 3rd, 2021, 7:15 pm

Is it a good scheme ?


This broadly equates to 3.5% annual average rate of growth. Given interest rates were over 5% for the earlier part of this period - though clearly have fallen considerably since - overall I would suggest doubling of money over the last 20 years or so has not been an above average investment.

T7

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Re: Seeking a little advice on my ISA

#401469

Postby Alaric » April 3rd, 2021, 7:32 pm

270160 wrote:. I just wonder if there would be penalties if she decided to stop investing --- £25 a month , and has done so for the last 20 years .


I think she would have to ask. Where there could be a "penalty" is if she decided to transfer the investment elsewhere as they might not pay the full nominal value if markets were down at the time of transfer.

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Re: Seeking a little advice on my ISA

#401474

Postby SPURLEY » April 3rd, 2021, 7:47 pm

Thank you for your replies .Robert


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