S&S ISA - is this right?

[TopCAD]

I'm thinking of starting a stocks and shares ISA, with both a lump sum and monthly savings, but If i'm honest it almost seems too good to be true.

Firstly, I know all funds haven't had the success that this one has but I'm just using this as an example to make sure my sums are correct.
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/f/fundsmith-equity-class-i-accumulation

If I started with £20,000 5 years ago and didnt add anything extra each month am I right in saying I would now £50,768.41

Opening Balance £20,000.00
Management Charge 0.45%
Fund Managers Charge 0.00%
Net on going charge 0.95%
Initial Charge 0.00%

	Year 1	Year 2	Year 3	Year 4	Year 5
Growth	31.33%	18.11%	27.45%	8.10%	24.63%
Management Charge	£90.00	£116.94	£116.94	£116.94	£116.94
Net on going charge	£190.00	£246.87	£246.87	£246.87	£246.87
Total Charges	£280.00	£363.80	£363.80	£363.80	£363.80
Value at end of Year	£25,986.00	£30,328.26	£38,289.56	£41,027.21	£50,768.41

[p1stonhead]

That particular fund has done very well indeed over 5 years. Its quite tech heavy but some of the heavy hitters inside (MSFT and FB) for example have tripled on their own in that period which has obviously helped.

High fees though for the fund.

Edited by p1stonhead on Wednesday 17th April 10:39

[rsbmw]

I like how you edited out your comment suggesting that 0.45% of £20k should have been £900 instead of £90 Mr Pointy

[Mr Pointy]

rsbmw said:

I like how you edited out your comment suggesting that 0.45% of £20k should have been £900 instead of £90 Mr Pointy

A finger slip on the calculator & then I looked at the post & did an engineeering approximation of 1% of £20k & realised it couldn't be right. The figures in the OPs table are still wrong though as the charges seem to be constant not increasing.

OP: if you are really taken with Fundsmith you can save on charges by going direct:
https://www.fundsmith.co.uk/

However you miss out on being able to move to the funds as you can if you are using a platform like HL (there re others as well). There have been a number of posts on this forum about Fundsmith so try a search for them.

[TopCAD]

Mr Pointy said:

A finger slip on the calculator & then I looked at the post & did an engineeering approximation of 1% of £20k & realised it couldn't be right. The figures in the OPs table are still wrong though as the charges seem to be constant not increasing.

OP: if you are really taken with Fundsmith you can save on charges by going direct:
https://www.fundsmith.co.uk/

However you miss out on being able to move to the funds as you can if you are using a platform like HL (there re others as well). There have been a number of posts on this forum about Fundsmith so try a search for them.

You are correct, my spreadsheet had an error, the net ongoing charge wasn't using the new value, but in reality it has a fairly insignificant impact:

	Year 1	Year 2	Year 3	Year 4	Year 5
Growth	31.33%	18.11%	27.45%	8.10%	24.63%
Management Charge	£90.00	£116.94	£136.48	£172.03	£183.56
Net on going charge	£190.00	£246.87	£288.12	£363.17	£387.51
Total Charges	£280.00	£363.80	£424.60	£535.20	£557.06
Value at end of Year	£25,986.00	£30,328.26	£38,228.77	£40,790.10	£50,265.64

I've looked at other funds and there are plenty that come out at £30,000 - £40,000 over a 5 year period.

So in summary I'm not missing anything then? Just that fund is a very successful one historically which was probably a bad example to use.

Edited by TopCAD on Wednesday 17th April 11:06

Edited by TopCAD on Wednesday 17th April 11:09

[rsbmw]

Yes that's how cumulative interest works, although it has been a particularly fruitful sample and time period.

[p1stonhead]

You aren’t missing anything other than the fact the obvious caveat that past performance shouldn’t be treated as a prediction.

Plus the last ten years have been insane in terms of the markets as a whole.

[Condi]

p1stonhead said:

Plus the last ten years have been insane in terms of the markets as a whole.

Woooo..... Go QE..... Making the rich richer since 2008.