Investment funds for beginners
Discussion
I put about £1500 a month into my Marcus account, but this is only growing by 1.35% a year. My daughter has a Child Trust Fund that I setup 12 years ago, and at the time I put the money into the best performing fund at the time. This was more a gamble than anything, just checked it this morning after not looking at it for years and the performance was :
2020 = 36.4%
2019 = -11.9
2018 = 26.5%
The money is invested in a Invesco UK Smaller Companies Equity Fund. My question is, as a complete novice, how can I invest a few hundred pounds a month into this fund?
Also, if I need to get the money out, is this an easy process and what is the risk of the fund just closing and me losing all my money?
2020 = 36.4%
2019 = -11.9
2018 = 26.5%
The money is invested in a Invesco UK Smaller Companies Equity Fund. My question is, as a complete novice, how can I invest a few hundred pounds a month into this fund?
Also, if I need to get the money out, is this an easy process and what is the risk of the fund just closing and me losing all my money?
Fidelity or Hargreaves Lansdown are arguably the most established providers.
You simply go online and open an account. If you aren't using your ISA allowance you would be best opening a Stocks and Shares ISA. Getting your money out is just as easy and would likely be less than 5 working days back into your main bank account.
You then pay cash in via bank transfer and invest it in the fund you choose. There are hundreds available.
There will be cheaper providers and if you aren't bothered about messing around you may be better off looking at one of the ready made Vanguard funds which have much lower fees, and on their own platform, lower fees generally than another provider.
After the Woodford debacle I'd say it's highly unlikely the fund you have you have mentioned will close.
As you will no doubt have seen there can be wild swings at times with this kind of investment and if that makes you nervous, or you have a short term plan for the money, it may be best looking at something else.
You simply go online and open an account. If you aren't using your ISA allowance you would be best opening a Stocks and Shares ISA. Getting your money out is just as easy and would likely be less than 5 working days back into your main bank account.
You then pay cash in via bank transfer and invest it in the fund you choose. There are hundreds available.
There will be cheaper providers and if you aren't bothered about messing around you may be better off looking at one of the ready made Vanguard funds which have much lower fees, and on their own platform, lower fees generally than another provider.
After the Woodford debacle I'd say it's highly unlikely the fund you have you have mentioned will close.
As you will no doubt have seen there can be wild swings at times with this kind of investment and if that makes you nervous, or you have a short term plan for the money, it may be best looking at something else.
Your years are a bit out, I think you mean 2017, 2018 and 2019 (it is down a bit so far in 2020).
It is certainly a good fund, but I would point out it is very expensive (1.67% a year plus your platform fees - so 2.02% a year with Fidelity and 2.12% a year with HL) and is very concentrated in one specific UK focused sector).
I would consider what trickywoo and 95JO and have a look at Vanguard.
This will give you far greater diversity in one place and at a much lower cost.
Still, as I say, the Invesco fund is very good at what it does. The real question is, do you want all of your equity exposure limited to UK smaller companies?
It is certainly a good fund, but I would point out it is very expensive (1.67% a year plus your platform fees - so 2.02% a year with Fidelity and 2.12% a year with HL) and is very concentrated in one specific UK focused sector).
I would consider what trickywoo and 95JO and have a look at Vanguard.
This will give you far greater diversity in one place and at a much lower cost.
Still, as I say, the Invesco fund is very good at what it does. The real question is, do you want all of your equity exposure limited to UK smaller companies?
95JO said:
Open a Vanguard S&S ISA, pick an LifeStrategy fund based on your risk appetite, setup a direct debit with whatever amount you're comfortable with, forget about it (or monitor it daily).
That's what I'm doing now and I definitely do the latter
I have just done exactly this with a monthly direct debit equivalent to an average car lease payment. Going to give it a few months to see how I feel about it, but I suspect I will max out my ISA allowance on this account rather than paying into the Marcus.That's what I'm doing now and I definitely do the latter
Cheers for all the advice, although I do have a talent of investing in things literally before they tank.
Joey Deacon said:
I have just done exactly this with a monthly direct debit equivalent to an average car lease payment. Going to give it a few months to see how I feel about it, but I suspect I will max out my ISA allowance on this account rather than paying into the Marcus.
Cheers for all the advice, although I do have a talent of investing in things literally before they tank.
The beauty of something like LifeStrategy is that you're getting mostly just the market return of the world albeit with a tilt towards the UK.Cheers for all the advice, although I do have a talent of investing in things literally before they tank.
So whilst you might beat yourself up at losing money you hopefully own't beat yourself up because you bet it all on "UK smaller companies" or one specific sector.
JapanRed said:
Ignoring the -11%.
36% growth in a year? And 26% 2 years before that?
Is this definitely correct?
I have seen 12.6% in 2 years (6.3% per year) and through I was doing well.....
I am going purely on the illustration from the fund.36% growth in a year? And 26% 2 years before that?
Is this definitely correct?
I have seen 12.6% in 2 years (6.3% per year) and through I was doing well.....
The other Child Trust Fund for Daughter No2 has not performed anywhere near as well.
JapanRed said:
Ignoring the -11%.
36% growth in a year? And 26% 2 years before that?
Is this definitely correct?
I have seen 12.6% in 2 years (6.3% per year) and through I was doing well.....
I held L&G Global Technology Fund Acc and Vanguard FTSE Developed World Ex UK from 2016-2019 which both performed well... So, definitely do-able. I wouldn't bank on it year on year though.36% growth in a year? And 26% 2 years before that?
Is this definitely correct?
I have seen 12.6% in 2 years (6.3% per year) and through I was doing well.....
95JO said:
Open a Vanguard S&S ISA, pick an LifeStrategy fund based on your risk appetite, setup a direct debit with whatever amount you're comfortable with, forget about it (or monitor it daily).
That's what I'm doing now and I definitely do the latter
Would this be worth doing with say, £200 per month?That's what I'm doing now and I definitely do the latter
At the moment I stick £200 pcm into a HTB ISA, and about £800 a month into a standard instant access savings account. I have about £5k total saved, with a view to buying my first property in 3-5 years time.
Whilst saving is working, i'm not seeing much interest, would it be worth hiving off £200 a month into a Vanguard S&S as you describe, or would the returns on such a low monthly amount not really be worthwhile?
designforlife said:
Would this be worth doing with say, £200 per month?
At the moment I stick £200 pcm into a HTB ISA, and about £800 a month into a standard instant access savings account. I have about £5k total saved, with a view to buying my first property in 3-5 years time.
Whilst saving is working, i'm not seeing much interest, would it be worth hiving off £200 a month into a Vanguard S&S as you describe, or would the returns on such a low monthly amount not really be worthwhile?
I don't see why not, however a better a use of your money would be to convert your HTB ISA in to a S&S LISA and invest in Vanguard LS (or any other funds) via that platform. So, not only will you have the ability to invest as you see fit with your pot, you'll get a 25% bonus from the Government.At the moment I stick £200 pcm into a HTB ISA, and about £800 a month into a standard instant access savings account. I have about £5k total saved, with a view to buying my first property in 3-5 years time.
Whilst saving is working, i'm not seeing much interest, would it be worth hiving off £200 a month into a Vanguard S&S as you describe, or would the returns on such a low monthly amount not really be worthwhile?
I did this from 2016-2019 in the aforementioned funds, cashed it out and used it as a deposit for my first house in October last year!
95JO said:
designforlife said:
Would this be worth doing with say, £200 per month?
At the moment I stick £200 pcm into a HTB ISA, and about £800 a month into a standard instant access savings account. I have about £5k total saved, with a view to buying my first property in 3-5 years time.
Whilst saving is working, i'm not seeing much interest, would it be worth hiving off £200 a month into a Vanguard S&S as you describe, or would the returns on such a low monthly amount not really be worthwhile?
I don't see why not, however a better a use of your money would be to convert your HTB ISA in to a S&S LISA and invest in Vanguard LS (or any other funds) via that platform. So, not only will you have the ability to invest as you see fit with your pot, you'll get a 25% bonus from the Government.At the moment I stick £200 pcm into a HTB ISA, and about £800 a month into a standard instant access savings account. I have about £5k total saved, with a view to buying my first property in 3-5 years time.
Whilst saving is working, i'm not seeing much interest, would it be worth hiving off £200 a month into a Vanguard S&S as you describe, or would the returns on such a low monthly amount not really be worthwhile?
I did this from 2016-2019 in the aforementioned funds, cashed it out and used it as a deposit for my first house in October last year!
I think i'm going to look at this Vanguard thing and see how it goes investing a little a month as mentioned, keep the HTB ISA going, and maybe revisit the LISA in a couple years (I'm 35 so theres a clock on that anyway), I like the idea of having something to supplement my probably meagre pension in future.
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