| Re: "guaranteed return" funds in a self select ISA [message #390731] |
Di, 30 Mai 2006 19:53 |
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"tony" <to [at] ny.com> wrote in message
news:447b384e$1_3 [at] mk-nntp-2.news.uk.tiscali.com...
> Hi there, just a quick question.
>
> I've sold all the shares / funds in my self select ISA and now it's all in
> cash. I don't want to keep it in cash as 1) the revenue don't like that,
> and 2) I'd like a little more growth than the few percent the ISA account
> gives me.
>
> Does anyone know if there are any "guaranteed return" products I can buy
> from within an ISA? Like the Guaranteed Equity Bonds the Post Office and
> Virgin sell?
Maybe a bond fund? There are various lower risk income funds out there, but
remember that bonds can get pounded in a high interest rate and inflationary
environment.
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| Re: "guaranteed return" funds in a self select ISA [message #390744 ] |
Mi, 31 Mai 2006 09:44 |
|
Hi,
Most 'guaranteed return' or 'protected' funds tend to be quite
complicated, and the nature of the guarantee or protection can really
vary from fund to fund. Most only 'guarantee' your capital upon certain
conditions - i.e. the index has reached a certain threshold in x years
time. They often have specific lock in periods.
It is quite difficult in most cases to work out whether these actually
do provide good value or not. I'm never really managed to work it out.
I find the best of these type of funds (or maybe I should say the least
convoluted) are the Escalator funds provided by Close Fund Management.
These have 'lock-in' dates each quarter where you can opt to 'lock-in'
previous gains, or else roll them over. Unfortunately, these are not
available via an ISA.
As the last poster stated, if you don't wish to take risks, then a bond
fund is the most suitable option after cash.
The problem you will find is that most of these 'guaranteed' or
'protected' funds do partly invest in equities, either directly, or
more probably indirectly (via the use of options and other
derivatives), with the capital security provided by an instrument such
as a Medium Term Note.
There is a list of available Protected funds at:
http://www.trustnet.co.uk/ut/funds/sector.asp?ima=PROTECT
Some of these are available for investment inside an ISA wrapper.
In my opinion, if you don't want to take risks associated with
equities, then don't invest in equities. While these funds may prevent
you losing some capital, should the market rocket up, you will only get
a proportion of the gains that you would have received than if you were
directly invested in equities - because part of your capital if being
used to provide the layer of 'protection'.
As you may have guessed, I'm no real fan of this type of fund.
Given that there could be more nasties on the markets over the next few
months, Cash does not seem a particularly bad place to be right now.
Rgds
Neil
------
Financial Calculators & Tools
www.invidion.co.uk
Virgils Ghost wrote:
> "tony" <to [at] ny.com> wrote in message
> news:447b384e$1_3 [at] mk-nntp-2.news.uk.tiscali.com...
> > Hi there, just a quick question.
> >
> > I've sold all the shares / funds in my self select ISA and now it's all in
> > cash. I don't want to keep it in cash as 1) the revenue don't like that,
> > and 2) I'd like a little more growth than the few percent the ISA account
> > gives me.
> >
> > Does anyone know if there are any "guaranteed return" products I can buy
> > from within an ISA? Like the Guaranteed Equity Bonds the Post Office and
> > Virgin sell?
>
> Maybe a bond fund? There are various lower risk income funds out there, but
> remember that bonds can get pounded in a high interest rate and inflationary
> environment.
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| Re: "guaranteed return" funds in a self select ISA [message #390749 ] |
Mi, 31 Mai 2006 10:37 |
|
Sorry,
It was an error to state above that the Close Escalator funds are not
available via an ISA.
Some are not available via their own ISA wrapper, but all should be
available via a decent self-select ISA.
Rgds
Neil.
n... [at] invidion.co.uk wrote:
> Hi,
>
> Most 'guaranteed return' or 'protected' funds tend to be quite
> complicated, and the nature of the guarantee or protection can really
> vary from fund to fund. Most only 'guarantee' your capital upon certain
> conditions - i.e. the index has reached a certain threshold in x years
> time. They often have specific lock in periods.
>
> It is quite difficult in most cases to work out whether these actually
> do provide good value or not. I'm never really managed to work it out.
>
> I find the best of these type of funds (or maybe I should say the least
> convoluted) are the Escalator funds provided by Close Fund Management.
> These have 'lock-in' dates each quarter where you can opt to 'lock-in'
> previous gains, or else roll them over. Unfortunately, these are not
> available via an ISA.
>
> As the last poster stated, if you don't wish to take risks, then a bond
> fund is the most suitable option after cash.
>
> The problem you will find is that most of these 'guaranteed' or
> 'protected' funds do partly invest in equities, either directly, or
> more probably indirectly (via the use of options and other
> derivatives), with the capital security provided by an instrument such
> as a Medium Term Note.
>
> There is a list of available Protected funds at:
>
> http://www.trustnet.co.uk/ut/funds/sector.asp?ima=PROTECT
>
> Some of these are available for investment inside an ISA wrapper.
>
> In my opinion, if you don't want to take risks associated with
> equities, then don't invest in equities. While these funds may prevent
> you losing some capital, should the market rocket up, you will only get
> a proportion of the gains that you would have received than if you were
> directly invested in equities - because part of your capital if being
> used to provide the layer of 'protection'.
>
> As you may have guessed, I'm no real fan of this type of fund.
>
> Given that there could be more nasties on the markets over the next few
> months, Cash does not seem a particularly bad place to be right now.
>
>
> Rgds
>
> Neil
>
> ------
> Financial Calculators & Tools
> www.invidion.co.uk
>
>
> Virgils Ghost wrote:
> > "tony" <to [at] ny.com> wrote in message
> > news:447b384e$1_3 [at] mk-nntp-2.news.uk.tiscali.com...
> > > Hi there, just a quick question.
> > >
> > > I've sold all the shares / funds in my self select ISA and now it's all in
> > > cash. I don't want to keep it in cash as 1) the revenue don't like that,
> > > and 2) I'd like a little more growth than the few percent the ISA account
> > > gives me.
> > >
> > > Does anyone know if there are any "guaranteed return" products I can buy
> > > from within an ISA? Like the Guaranteed Equity Bonds the Post Office and
> > > Virgin sell?
> >
> > Maybe a bond fund? There are various lower risk income funds out there, but
> > remember that bonds can get pounded in a high interest rate and inflationary
> > environment.
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