The FTSE

[I'm no cynic but...]

It is obviously going to be a big worry to those approaching retirement but for anyone with several years to go then it can come as a chance to really add some value to their funds. I have read elsewhere at times like these that on a 5-year rolling time scale [eg 2014 to 2019, 2000-2005 etc] there have been relatively few periods where the end of period share indices have been lower than the start of the period. As pension contributions are spread throughout the contributor's working life, the chance to add more fund at a lower price is obviously more advantageous than adding at a high price later in life when their is less chance for the fund to work it's magic. The principle is known as 'pound cost averaging'. It may come as a relief that these funds are huge affairs and usually administered by financial organisations that have existed for decades, even in the 1800's and have thrived even throughout two world wars or throughout major recessions. Just keep a close watch on your chosen companies and carefully read any updates they should send your way. And if it doesn't seem right [a good enough principal in it's own right], you can always have access to your chosen Independent Financial Adviser who will happily put your minds at rest.

 

[MCFC_ Phil]

It is obviously going to be a big worry to those approaching retirement but for anyone with several years to go then it can come as a chance to really add some value to their funds. I have read elsewhere at times like these that on a 5-year rolling time scale [eg 2014 to 2019, 2000-2005 etc] there have been relatively few periods where the end of period share indices have been lower than the start of the period. As pension contributions are spread throughout the contributor's working life, the chance to add more fund at a lower price is obviously more advantageous than adding at a high price later in life when their is less chance for the fund to work it's magic. The principle is known as 'pound cost averaging'. It may come as a relief that these funds are huge affairs and usually administered by financial organisations that have existed for decades, even in the 1800's and have thrived even throughout two world wars or throughout major recessions. Just keep a close watch on your chosen companies and carefully read any updates they should send your way. And if it doesn't seem right [a good enough principal in it's own right], you can always have access to your chosen Independent Financial Adviser who will happily put your minds at rest.

Well I like that. I'm 5 years off from taking the pot. So hopefully will work for me. Basically it's what my financial adviser said to me and it makes sense, and I think the Pru has existed for years. Got their fingers in lots of pies.

 

[I'm no cynic but...]

Well I like that. I'm 5 years off from taking the pot. So hopefully will work for me. Basically it's what my financial adviser said to me and it makes sense, and I think the Pru has existed for years. Got their fingers in lots of pies.

Founded 1848 and has 20m Life customers. That doesn't mean too much in itself but it gives you an idea that the company has seen and coped with everything thrown it's way.

 

[sky tot]

Well I like that. I'm 5 years off from taking the pot. So hopefully will work for me. Basically it's what my financial adviser said to me and it makes sense, and I think the Pru has existed for years. Got their fingers in lots of pies.

Similar to yourself , I’ve got 6 years till my pension hits maturity. I pay £300 at the moment which increases by 2.5% every year . I’m scared to look at the moment, I need to stop burying my head in the sand and book appointment with a Pru advisor . My mortgage ends in 12 months so I want to use some of the spare cash to bump my pension up ..Phone call on Monday I think

 

[Skip Donoghue]

If anyone has a few quid to spare have a look at an EV (electric car) company in China called NIO, they are aiming to be a competitor to Tesla, they have just raised $400mil in a share issue and have had a $1billion investment from the Chinese government
It is high risk at the min, but the shares are trading around $7.40 mark but its likely this will increase to double figures when Junes sales are released early July

For an example Tesla started at $17 a share back in 2010 and are trading at the moment at over $1000 a share

I'm not saying this is in anyway a Tesla but if it could be half a Tesla the returns could be mint
Some big players Gold man, Jp Morgan, Bank Suisse have been buying up large amounts of this stock recently also

 

[MCFC_ Phil]

Thought I'd have a look at my fund. Interesting info here- Look at that drop off in Feb. Even Eddie the Eagle couldn't ski that. I'm sill happy enough with the value though.

Prudential PruFund Risk Managed 3 Fund Ser E
Essentials Portfolio Analysis Background Data Performance View PDF Factsheet
Portfolio data accurate as at: 31/03/20
Performance

Discrete performance - to last month end
31/05/15
to
31/05/16 31/05/16
to
31/05/17 31/05/17
to
31/05/18 31/05/18
to
31/05/19 31/05/19
to
31/05/20
Fund n/a n/a n/a 2.7% -5.7%
Annualised performance
Annualised
3 Years to
31/05/20 5 Years to
31/05/20 10 Years to
31/05/20
Fund n/a n/a n/a

Fund Aims


Objective: The fund aims to achieve long-term total return (the combination of income and growth of capital). The fund is actively managed and aims to limit the fluctuations ('volatility') your investment experiences, after allowing for smoothing, to 12% per annum over the medium to long term. There is no guarantee that the fund will achieve its objective of managing the volatility to the target level.



Fund Manager
M&G Treasury & Investment Office manager of the underlying fund for 5 years and 6 months

With access to investment professionals around the world and assets under management of £178bn, the M&G Treasury & Investment Office (T&IO) has a broad and well-resourced investment capability. T&IO set the strategic asset allocation and undertakes the ‘manager of managers’ role for our insured funds. Over the years they have built a thorough and effective governance framework, which includes the setting and monitoring of investment mandates, regular performance and activity health checks and independent analysis of investment, credit and liquidity risks.

Fund Overview
Bid (19/06/2020) 170.60
Offer n/a
Fund size -
Launch date 26/09/2017
Fund Charges
Annual Management Charge (AMC) 0.65%
Further Costs 0.14%
Yearly Total 0.79%
Portfolio data accurate as at: 31/03/20
Asset Allocation
UK Fixed Interest



14.60%
US Fixed Interest



14.10%
UK Equities



13.40%
Property



12.70%
Pacific Market Equities



6.90%
Other Investment Assets



6.10%
North American Equities



5.80%
European Equities



5.80%
Euro Fixed Interest



5.20%
Asia Fixed Interest



5.10%
Japanese Equities



3.00%
Other Fixed Interest



2.60%
Cash



2.40%
Global Emerging Markets Equities



2.30%

 

[MCFC_ Phil]

Similar to yourself , I’ve got 6 years till my pension hits maturity. I pay £300 at the moment which increases by 2.5% every year . I’m scared to look at the moment, I need to stop burying my head in the sand and book appointment with a Pru advisor . My mortgage ends in 12 months so I want to use some of the spare cash to bump my pension up ..Phone call on Monday I think

That's a good amount per month. Definitely worth the call. Let us now how you get on.

 

[M18CTID]

It is obviously going to be a big worry to those approaching retirement but for anyone with several years to go then it can come as a chance to really add some value to their funds. I have read elsewhere at times like these that on a 5-year rolling time scale [eg 2014 to 2019, 2000-2005 etc] there have been relatively few periods where the end of period share indices have been lower than the start of the period. As pension contributions are spread throughout the contributor's working life, the chance to add more fund at a lower price is obviously more advantageous than adding at a high price later in life when their is less chance for the fund to work it's magic. The principle is known as 'pound cost averaging'. It may come as a relief that these funds are huge affairs and usually administered by financial organisations that have existed for decades, even in the 1800's and have thrived even throughout two world wars or throughout major recessions. Just keep a close watch on your chosen companies and carefully read any updates they should send your way. And if it doesn't seem right [a good enough principal in it's own right], you can always have access to your chosen Independent Financial Adviser who will happily put your minds at rest.

Very sound advice, and I started putting a few more quid away each month in April. Investing more during the dips makes perfect sense. Trouble is, virtually all my funds are now trading at record highs - they took a right battering due to the pandemic, but have already bounced back to pre-pandemic levels and beyond! Covid-19 led to a big slump but it’s been nowhere near as protracted as the slumps that followed 9/11 and the global banking crisis so I think the opportunity of picking up a few bargains has already been and gone.

 

[Homar]

Tesla looks like a disaster waiting to happen. Shares selling for $1000 a piece, despite the fact that the company is yet to turn a profit over more than a quarter. JP Morgan recently set a price target of $275 a share. Even the CEO thinks thinks the valuation is too high. Seems like a bubble to me. They’re not the only ones though. Shares in Nikola have risen 6.5X over the last two months and they don’t even have a product to sell!

 

[Wafty Cranker]

Tesla looks like a disaster waiting to happen. Shares selling for $1000 a piece, despite the fact that the company is yet to turn a profit over more than a quarter. JP Morgan recently set a price target of $275 a share. Even the CEO thinks thinks the valuation is too high. Seems like a bubble to me. They’re not the only ones though. Shares in Nikola have risen 6.5X over the last two months and they don’t even have a product to sell!

It's nuts, lots of US companies seem overpriced right now, but Tesla is one that is leading the way.

The markets are a strange place at the moment. Hertz is heading for bankruptcy yet it's stock rallied. I think people are just gambling thinking it's worth a punt if they can somehow survive.

 

[hammersmithlad]

Hi chaps…a quick question since I’m being harassed by continuous emails from my Stocks & Shares ISA. Is it wise to continue to investing on a monthly basis in a ETF Stocks & Shares ISA until I hit the £20k tax relief allowance or would it be better to also diversify into actual mutual funds offered by Hargreaves Lansdown or Vanguard? Unsure if I should stick with the ETFs or delve into more actively managed funds from the big boys, at the expense of losing some of the tax relief offered by the ISA.

 

[Homar]

It's nuts, lots of US companies seem overpriced right now, but Tesla is one that is leading the way.

The markets are a strange place at the moment. Hertz is heading for bankruptcy yet it's stock rallied. I think people are just gambling thinking it's worth a punt if they can somehow survive.

Yep. I think there are a lot of new/young investors that entered the market during the crash having identified a golden window of opportunity. Unfortunately, they’ve been suckered in by the promise of a fast buck, betting on failing airlines or cruise ships and jumping on stocks that are soaring (often for no tangible reason). It’s reminiscent of the dot-com bubble. They might even do well, if they can exit before the pop, but it’s a fools game. I worry for those investing on margin. The insane runs on the recent IPOs makes me worry that we’re heading for a large correction.

 

[Homar]

Hi chaps…a quick question since I’m being harassed by continuous emails from my Stocks & Shares ISA. Is it wise to continue to investing on a monthly basis in a ETF Stocks & Shares ISA until I hit the £20k tax relief allowance or would it be better to also diversify into actual mutual funds offered by Hargreaves Lansdown or Vanguard? Unsure if I should stick with the ETFs or delve into more actively managed funds from the big boys, at the expense of losing some of the tax relief offered by the ISA.

Can’t you trade those funds through your ISA? I would always use up your ISA allowance before investing outside of it.

 

[journolud]

I have my ISA with HL and it is spread over a few funds. Don’t get anywhere near the annual limit though

 

[Wafty Cranker]

Yep. I think there are a lot of new/young investors that entered the market during the crash having identified a golden window of opportunity. Unfortunately, they’ve been suckered in by the promise of a fast buck, betting on failing airlines or cruise ships and jumping on stocks that are soaring (often for no tangible reason). It’s reminiscent of the dot-com bubble. They might even do well, if they can exit before the pop, but it’s a fools game. I worry for those investing on margin. The insane runs on the recent IPOs makes me worry that we’re heading for a large correction.

Yeah, I agree. It’s new retail investors. Unfortunately some of them will have terrible money management skills and will be risking all their capital on one leveraged trade. I heard an interview with one guy who did exactly that. It paid off for him and now he’ll more than likely look for the next stock to use the same strategy. Only sooner or later he’ll get wiped out.

There was one poor kid that ended up commiting suicide as he thought he lost $730k on Robin Hood. There is some confusion and it turns out that figure is just some out of hours figure and not a true reflection of his position.

They reckon some of the investors are people that would usually bet on sports but have switched across to the stock market in the absence of live sport. Influence like Dave Pornoy claiming his better than Warren Buffet and no doubt making a mint as an affiliate for these sites don’t help.

 

[Wafty Cranker]

Hi chaps…a quick question since I’m being harassed by continuous emails from my Stocks & Shares ISA. Is it wise to continue to investing on a monthly basis in a ETF Stocks & Shares ISA until I hit the £20k tax relief allowance or would it be better to also diversify into actual mutual funds offered by Hargreaves Lansdown or Vanguard? Unsure if I should stick with the ETFs or delve into more actively managed funds from the big boys, at the expense of losing some of the tax relief offered by the ISA.

All those products are tradable within the ISA wrapper. If your ETF’s that are within an ISA aren’t with someone that offers managed mutual funds as well, you could always look to transfer it across to HL or Vanguard that do offer all products you want. I’ve never actually done a transfer so I’m not sure if you’d be out of the market for a while they sort out the transfer.

If you left your ETFs where they are and invested outside of your ISA realistically what is the chance of your going over the CGT threshold on the investment outside of the ISA?

The answer depends on how much you’re looking to invest outside of an ISA, for how long, what other investments you have, and even if you’re married.

For example, I have investments outside of my ISA so I can trade CFD’s but unless I get really lucky I won’t be liable for CGT so am not worried about it.

 

[hammersmithlad]

Can’t you trade those funds through your ISA? I would always use up your ISA allowance before investing outside of it.

All those products are tradable within the ISA wrapper. If your ETF’s that are within an ISA aren’t with someone that offers managed mutual funds as well, you could always look to transfer it across to HL or Vanguard that do offer all products you want. I’ve never actually done a transfer so I’m not sure if you’d be out of the market for a while they sort out the transfer.

If you left your ETFs where they are and invested outside of your ISA realistically what is the chance of your going over the CGT threshold on the investment outside of the ISA?

The answer depends on how much you’re looking to invest outside of an ISA, for how long, what other investments you have, and even if you’re married.

For example, I have investments outside of my ISA so I can trade CFD’s but unless I get really lucky I won’t be liable for CGT so am not worried about it.

Cheers for the responses & am certainly no wizard on the subject.

A few years ago I put a couple of grand in the retail Stocks and shares ISA offered by Moneyfarm, as at the time they didn’t charge any fees but now do. In all fairness & compared to others on this thread my portfolio didn’t get hit too badly with the lowest point down by 16% and now it’s currently up 6% so can’t complain too much.

Since it seems to be a basic platform offered, as far as I can tell they only deal in ETFs which probably means my stocks and shares ISA will never beat the market but just track it.

Apart from 2 pensions, which I don’t intend to retire for a while & some NS&I which is more of a if I win the lottery investment, I don’t hold any further investments which would go over my personal savings allowance or CGT band.

Sounds like I should really use up more of my Stocks and Shares ISA allowance but am fearful to transfer it to another platform in this uncertain environment & if my current provider is performing to the benchmark – it should do right if they are entirely composed of ETFs?

May also look into Wafty Cranker’s point on other general investments from HL or Vanguard since I’m nowhere near my CGT threshold.

 

[Homar]

Cheers for the responses & am certainly no wizard on the subject.

A few years ago I put a couple of grand in the retail Stocks and shares ISA offered by Moneyfarm, as at the time they didn’t charge any fees but now do. In all fairness & compared to others on this thread my portfolio didn’t get hit too badly with the lowest point down by 16% and now it’s currently up 6% so can’t complain too much.

Since it seems to be a basic platform offered, as far as I can tell they only deal in ETFs which probably means my stocks and shares ISA will never beat the market but just track it.

Apart from 2 pensions, which I don’t intend to retire for a while & some NS&I which is more of a if I win the lottery investment, I don’t hold any further investments which would go over my personal savings allowance or CGT band.

Sounds like I should really use up more of my Stocks and Shares ISA allowance but am fearful to transfer it to another platform in this uncertain environment & if my current provider is performing to the benchmark – it should do right if they are entirely composed of ETFs?

May also look into Wafty Cranker’s point on other general investments from HL or Vanguard since I’m nowhere near my CGT threshold.

If it was a few years ago then you can just open another ISA account with another brokerage. Your £20k ISA allowance resets on the 6th of April every year. So unless you’ve paid into your existing account since the 6th of April, you can just open a new stocks & shares ISA account. I personally have accounts with three different brokerages. HL are pretty good, but the fees are quite high if you trade individual stocks.

You can even cash out of your old account and use it to fund your account for this year. That is fine if you aren’t planning on hitting your £20k limit for this year.

Regarding whether your ETF tracks the broader market, it depends on what your ETF invests in. If it is tracking an index, like the FTSE 100 or S&P 500, then it will broadly track the market. Though those indices obviously have different exposures to various industries and geographic locations.

Unless you know what you’re doing, investing in ETFs with strong track records seems quite sensible. You pay a management fee for somebody else that hopefully knows what they’re doing to pick stocks for you. Just check that the fees are reasonable and that the fund has performed well over a long period of time.

 

[DenisLawBackHeel74]

If anyone has a few quid to spare have a look at an EV (electric car) company in China called NIO, they are aiming to be a competitor to Tesla, they have just raised $400mil in a share issue and have had a $1billion investment from the Chinese government
It is high risk at the min, but the shares are trading around $7.40 mark but its likely this will increase to double figures when Junes sales are released early July

For an example Tesla started at $17 a share back in 2010 and are trading at the moment at over $1000 a share

I'm not saying this is in anyway a Tesla but if it could be half a Tesla the returns could be mint
Some big players Gold man, Jp Morgan, Bank Suisse have been buying up large amounts of this stock recently also

bought NIO in Jan around four dollars and some change per share. Only for long term investors this one.

iirc it’s around 160% up since Oct last year (or thereabouts).

I’m hoping it proves the second mover advantage correct....

 

[hammersmithlad]

If it was a few years ago then you can just open another ISA account with another brokerage. Your £20k ISA allowance resets on the 6th of April every year. So unless you’ve paid into your existing account since the 6th of April, you can just open a new stocks & shares ISA account. I personally have accounts with three different brokerages. HL are pretty good, but the fees are quite high if you trade individual stocks.

You can even cash out of your old account and use it to fund your account for this year. That is fine if you aren’t planning on hitting your £20k limit for this year.

Regarding whether your ETF tracks the broader market, it depends on what your ETF invests in. If it is tracking an index, like the FTSE 100 or S&P 500, then it will broadly track the market. Though those indices obviously have different exposures to various industries and geographic locations.

Unless you know what you’re doing, investing in ETFs with strong track records seems quite sensible. You pay a management fee for somebody else that hopefully knows what they’re doing to pick stocks for you. Just check that the fees are reasonable and that the fund has performed well over a long period of time.

Thanks for the info. I held off topping up my current Moneyfarm S&S ISA in this new tax year, so am open to exploring another provider since I've read most robo semi-actively managed ISAs will naturally invest with more caution & unlikely to catch the upside of any large stock market changes.

A few people seem to have recommended/spoken well of Vanguard and in particular their Life Strategy S&S ISAs.

Curiously, if I were to invest now in a high equity to bond ratio fund such as 80:20, I would have avoided the March/April large percentage drop in such a high equity portfolio but in theory will catch the coat tails of an inevitable equity value increase right?

Looking at their latest website performance charts their Lifestrategy 80:20 portfolio increased 4.97% in May compared to 2.88% for their 40:60 portfolio.

Was thinking of possibly going down this route and changing to a different lower equity Lifestrategy portfolio next tax year. Hoping of course, we don't see another global pandemic of this magnitude which would decrease equities to the extent of this year.

Thoughts would be much appreciated.