Your questions answered Vol 2 - IM Private Clients

[Intelligent Money]

Bubbas Grill said:

Simpo Two said:

What I find interesting, no actually incomprehensible and frustrating because my money is on the table, is that companies we learn every day are 'really strong' on paper in theory - are simply not turning in the results. Time after time. If all the professional analysts and market makers are looking at the same numbers that Adam is... what other factor/s are they all missing? Why did they miss it/them, and what is it/them? Ukraine? Inflation? Biden? Part of the equation is missing.

Completely agree. Feels like we're getting blitzed with stats while our numbers tumble. Yes I'm in for the long-game, understand it goes up and down like your pants, but no I'm quite seriously bewildered with the current presentation of info. Does it make sense from a general Client viewpoint to complicate it so? Are we Clients now to decide ourselves based on all those stats? Difficult to do when it's not our remit in the agreement.

JPH....are you OK? I hope you are happy and healthy and please remind us directly in Human terms why we should all relax.

Thanks!

Hi BubbasGrill

I'll try and offer a soothing view. The numbers that we see in Adams posts should offer some comfort that the companies that we hold are not on the brink of collapse and in some cases are stronger than ever. On that basis they are unlikely to disappear overnight and so will always have a value. The swing in the stock price is mostly sentiment rather than a problem with the business or the business fundamentals.
Sentiment swings and changes far more quickly than fixing a major problem with the underlying business so while it is likely to remain choppy for a while when the tide turns the recovery is likely to swifter when the problem is sentiment not a broken business.

The current climate is a tough one but we invest rather than trade, we look at returns over years rather than days/weeks/months and remain confident that the holdings that we have are stable strong companies that will recoup the losses, the time that this will take is a little harder to predict!

Cheers

Nik

[Intelligent Money]

PM3 said:

Phooey said:

Quick question to IM

Is there any other charges other than the fund/portfolio charge (for example 0.47% Index100) for new money going in? Like for example a transaction charge or dealing charge etc etc?

Ta

I was wondering about same recently

Hi Phooey and PM3

No, there are no other fees applied to Piston Head accounts. The only fee is the annual management fee for the portfolio which is accounted for daily.

Cheers

Nik

[Intelligent Money]

superlightr said:

Hi Adam

I may be really daft and it may have been answered already and Ive not understood

with IMGG I understand the equity is in individual stocks for different markets ie US/ UK/Japan etc but with these equities how many are in each? are they in single numbers or hundreds or thousands?

With the Index 100 - global equity index tracker - say the US part is that just S & P 500 or Dow or Nasdaq or all of those etc?

same with the UK? is it FTSE 100 or FTSE 250 or FTSE all share index

just trying to get a handle of about how many/diversity are in each fund.

Edited by superlightr on Tuesday 17th May 17:06

HI SL

IMGG doesn't hold any individual stocks. We actively manage the asset allocation i.e. Equity/Non Equity split and then the geographical distribution of the equities and the make up of the non equity holding.
We then build that asset mix using passive vehicles, so use ETFS and Trackers not individual stocks.

For the Index portfolios, The mandate is to track the world market by market capitalisation and is re-balanced to do that quarterly.
It may vary what it tracks in each location so for the UK it may use FTSE 100, FTSE 250, all the All Share, a mix of all or just one index. In the US it may be S&P 500, DOW,NASDAQ again it may be a mix or just track one index. This will vary at different time.

Cheers

Nik

[Intelligent Money]

xerawh said:

IM team, is there any rational explanation of why PHE is suffering such big drops? Or is it just market sentiment? Any thoughts on outlook for the near future (1-2 years) in the background of this Ukraine war and inflation?

I am trying to work this out but new to the investment jargon so always find your explanations helpful.

Hi Xerawh

The short answer is no!

The underlying fundamentals and to a large extent performance of the businesses remains strong but this isn't transferring through to the share price.

In tough market conditions the majority of the companies held in PHE are holding up comparably well.

PHE is made up of consumer staples and as we know this sector as whole is not popular at the moment. This is compounded by the fact that Equites as a whole are struggling at the same time.

We remain confident that the companies offer good value and that the markets will return. As staple strong holdings the companies in PHE should benefit from the upturn fairly early in the cycle.

The time line to the turn is the difficult one to try and predict at the moment!

In summary we are confident that PHE will bounce back but the timeline is still not easy to call.

Cheers

Nik

[Intelligent Money]

Hi All

Apologies for the issues with the PHE feed. The custodian is having an issue allocating the new listing for Amazon post share split. We are working with them to get it fixed and will get there a soon as we can.

Regards

Nik

[Intelligent Money]

Stevil said:

Any more news on the managed offering and when we might be able to get involved there?

Hi Stevil

We are in the final stages and with a following wind we will be good to go in the next 10 days.

Slightly behind where we would of liked to be but back on track now.

Cheers

Nik

[Intelligent Money]

NorthDave said:

There isn't much chat about PHO on here! Am I the only one in it? My values are down about 30% from peak which is a kick in the teeth.

Glad I haven't gone all in! Guess I just have to log out and forget about it for a few years.

Hi NorthDave

I think it is fair to say that PHO has had a rough ride in recent conditions, but as an opportunities portfolio while it is disappointing it’s not overly surprising.

We take a good look at, and review the holdings on a regular basis and remain confident that the “opportunity” still exists and that both the value and the growth will come, the timeline that will manifest over is a little more difficult to map out!

Cheers

Nik

[Intelligent Money]

Gallons Per Mile said:

Hi Steve, it's just a S&S ISA, not a pension. Do beneficiaries even need to be declared for an ISA? I'm pretty sure I did with mine, but I may be wrong!

Hi GPM

There is no option for beneficiaries for an ISA or GIA.

A Pension is established under a trust so by using a named discretionary beneficiary the proceeds of a pension can be passed on in death with no IHT liability. This only applies to a pension.

ISA's and GIA's are held in the individuals name so form part of the estate on death and cannot have beneficiaries attached.

A surviving spouse can inherit the ISA allowance of their spouse using the Additional Permitted Subscription Allowance. (APS)

Hope this helps

Cheers

Nik

[Intelligent Money]

seapod said:

Morning IM team,

Can I check something please - Mrs SP isn't working at the moment, ie she is paying no income tax. Am I right in thinking that she is still able to contribute to her SIPP and get 20% tax relief up to £3,600 per year. So she contributes £2,880 and then £720 gets added in by the govt.

This seems to good to be true..? She has paid no income tax on any earnings this tax year to be clear and will not before the end of it.

If so, then I will set her up with a DD to her IM SIPP for £240/mth.

Cheers

Hi Seapod

It is true. Any non earner can contribute £2,880 p.a. into a pension and receive £720 p.a.into the pension from the government.

Cheers

Nik

[Intelligent Money]

Grandad Gaz said:

Grandad Gaz said:

Simpo Two said:

Could Grandad Gaz open an account at IM in his mother's name? The money is still hers, he'd just be in charge of of it.

I don’t know actually but I got the impression from the bank that it’s probably no. They want to invest it for her!

Thanks Julian and others who have made suggestions. It’s much appreciated!
I do have LPA as I have been paying all her bills which were related to the house since my father died last October.

Forgot to say, it’s her account we have been using for her bills.

Hi Grandad Gaz

With an LPA you will usually have the power to make investment decisions on behalf of the "donor" but those investments will still be in the donors name.

So you have the power to set an IM account up in your mums name and manage that account for her but not to move funds across into your name.

Drop me a PM if you need any more detail or need any help with HSBC

Cheers

Nik

[Intelligent Money]

Grandad Gaz said:

Intelligent Money said:

Grandad Gaz said:

Grandad Gaz said:

Simpo Two said:

Could Grandad Gaz open an account at IM in his mother's name? The money is still hers, he'd just be in charge of of it.

I don’t know actually but I got the impression from the bank that it’s probably no. They want to invest it for her!

Thanks Julian and others who have made suggestions. It’s much appreciated!
I do have LPA as I have been paying all her bills which were related to the house since my father died last October.

Forgot to say, it’s her account we have been using for her bills.

Hi Grandad Gaz

With an LPA you will usually have the power to make investment decisions on behalf of the "donor" but those investments will still be in the donors name.

So you have the power to set an IM account up in your mums name and manage that account for her but not to move funds across into your name.

Drop me a PM if you need any more detail or need any help with HSBC

Cheers

Nik

Thanks Nik. How do I find your email address?

If I can set up an IM account in my mums name, I would like to do that.
Ideally, £600k into it and then I would really like to open a bank account with a different bank, also in her name, in which I could transfer the rest of her money. This would be used for her care fees and should last a couple of years.
Then I can shut down her damn HSBC account. The sooner the better!

Hi Grandad Gaz

[e-mail]

Cheers

Nik

[Intelligent Money]

Phooey said:

Given the UK is looking farked ("long recession") am I correct in thinking Index100 contains no UK exposure?

Hi Phooey

The UK exposure is mixed in with the European exposure. It typically varies from 3 - 6% depending on how much the UK market represents in the world wide market.

Cheers

Nik

[Intelligent Money]

NorthDave said:

Can anyone tell me what the charges are for the new Lifestyle products?

Also when I look at switching the options seem to be "lifestyle growth for income" and "lifestyle growth for withdrawl". I want my funds to grow until I need them so which do I pick?

Hi NorthDave

The only charge is the annual management charge of 1%, accounted for daily. There are no initial charges and no exit charges.

Growth for withdrawal is if you plan to use the funds as a lump of cash at the end.
Growth for income is if you plan to draw the funds down as an income at the end.

Hope that helps. If you need any more info please just drop me a message at [e-mail]

Cheers

Nik

[Intelligent Money]

KTF said:

Speaking of the new Lifestyle products, has anyone signed up for them yet?

If there are only two options available then will there be fund sheets available showing performance, etc as I thought Lifestyle was meant to be unique to each investors circumstances?

Hi KTF,

The fact sheets will have some indicative performance added as the portfolios build a history. As you say this will be indicative as the actual performance will vary depending on your choices.

The performance that will be built onto the fact sheets over time will give you an indication on what performance looks like over 1,3,5,etc years which should then relate to the timeline you select for your investment at outset.

Cheers

Nik

[Intelligent Money]

Grandad Gaz said:

Am I right in thinking that you have to sign up for a fixed period ,i,e 1 year,2 years, etc, and cannot make changes within that time?

Hi Grandad Gaz

No there is no fixed period.

You select a period at outset to give an indication how long you think you will be investing for. This allows us to manage the portfolio at outset against that timeline.

If that changes for any reason we can simply re-align the portfolio to match your new timeframe.

You can also chose to exit or switch into other portfolios at any time with no exit or switch fees.

While Lifestyle is designed to manage your portfolio over a timeframe we know that life isn't always that predictable so it is fully flexible to fit in with any changes as they happen.

Regards

IM

[Intelligent Money]

Grey_Area said:

Presuming hpothetically that there's 2 pots of funds, each with 100k in, for ease of use in numbers.

One set is made up of ISA's, the other is a pension pot.

Which one should be drawn down first, and why. I'm wracking my tiny cerebral calculator in trying to establish whats the best method going forward when the time comes, but with all this crystalising funds, taking some from an ISA and perhaps topping the pension up as we go, I'm suffering from analysis paralysis..

TIA

Hi Grey_Area

The first consideration will be how much annual income do you need?

There are then a number of areas to consider, tax on the income, other investments in taxable areas that may be usable and IHT/Estate planning. Often a combination of pension and ISA income works well.

Using your income tax allowance to draw pension income along with some tax free cash and then topping up with ISA income is an option

You don't need to crystallise all of the pension pot in one go so this offers the ability to draw £16,760 p.a. from your pension and pay no income tax.
You also have a Capital Gains Tax allowance of £12,300 p.a. so you can take income from assets held outside of ISA's and Pension and keep the tax bill low.

You can then either decide to top up income from ISA's with no tax to pay or accept a 20% tax rate if needs be.

From and IHT perspective, ISA allowances can be passed between spouses but otherwise will form part of the estate for IHT purposes, Most pension pots can be passed on outside of the estate so are free from IHT.

I'm happy to cast an eye of your situation and share some thoughts if that would useful

[e-mail]

Cheers

Nik

[Intelligent Money]

2Btoo said:

Another distantly-relevant question which may be better elsewhere ....

Is there any way of getting money out of a GIA without crystallising the gains? I am aware of the fact that you can take a gain of up to the annual CGT limit each year, and that if you take £1 out of the GIA then you can calculate the proportion that is gain and the proportion that was original investment, but is there any way of getting more than the CGT allowance out without paying a thumping great big tax bill? Something like an in-specie transfer of ISA's and pensions and whatnot?

I am pretty sure that the answer is a simple 'No' but I thought I'd ask.

Hi 2Btoo

The simple answer is unfortunately no.

You can transfer assets between spouses with no CGT, but the asset is treated as transferred at the price that you purchased at so all you really do is transfer the gain over. It allows you to use both CGT allowances if one partner is using theirs.

Capital gain is wiped out on death, but that seems a high price to pay to avoid some tax and it could well then just fall into the IHT band!

Cheers

Nik

[Intelligent Money]

2Btoo said:

Slightly leftfield question: can a company open an IM account? Or, putting it another way, my company has some excess funds which are doing nothing in the company bank account. Can the company invest them in IM?

Hi 2Btoo

Yes a company can hold a GIA

Drop me a message at [e-mail] and i can take you through the process

Cheers

Nik

[Intelligent Money]

Mr Whippy said:

Can I just double check.

Cash in a pension wrapper in IM (metro bank names trustee acct iirc) is covered with pension wrapper fscs protection.

Simply, if there is over £85k or whatever in cash it’s covered?


Many thanks

Hi Mr Whippy,

If we, Intelligent Money fail, then 100% of your holdings are covered
If Metro bank fail then £85k your cash holdings are covered

Regards

Nik

[Intelligent Money]

[quote=Grey_Area]Quick question, Pension vs ISA monthly investment, term of 2 years, might be more...

If I put £500/month into a Pension, or a ISA for 2 years, assuming 5% growth, both the same investment strategy and portfolio; why would I put the money into a pension fund if there's availability in the ISA left?

It looks to me on a cigarette packet calculation that ISA = 12579 after growth, Pension = 15095 after growth and (Gov contribution,) but after tax at £3019 the pension is worth less by £500 when all said and done.

Standard rate tax payer btw, and this would be in addition to other income already being taxed at standard rate

Am I missing anything obvious?

TIA[/quote}

Hi Greyarea

By using a pension you are gaining £2,400 of additional contribution over the two year term.
Your calcs show this adding £2,516 to the pension compared to the ISA, this may be a little conservative but at the end of the day it is down to fund performance so a variable at best.

Assuming your income tax allowance is used up by other benefits, so all your pension income will be taxed, you best case with the pension is £12,830.75
net income, this uses the 25% tax free element and assumes you draw the rest of the pot keeping your income within the 20% band

This gives you an additional £251 via the pension route, but does come with the caveat that you need to keep your total income in any year in the 20% band and cannot access until 10 years before you state pension age.

This may mean that while the maths say the pension route is potentially marginally more efficient, in real life terms you may prefer the flexibility of the ISA.

Hope that helps

Nik