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OzzMosiz

Tracker Units Trusts

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I'm thinking of starting a Tracker Unit Trust, but wonder if I can wrap this in an ISA, as my Mini Cash-ISA is maxed out for the tax year. Can anyone help?

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OzzMosiz, you also have a £4k mini shares ISA allowance per tax year. If you had put nothing in a cash ISA this year (April 2005 to April 2006) then you would have £7k available allowance in a maxi (shares) ISA.

I'm assuming you haven't used 2005/2006's £4k shares mini ISA allowance, so you can therefore use this before April this year. Come April you will have your full £7k allowance again to use as a £7k maxi shares ISA or a £3k cash + £4k min shares ISA.

You could go with someone like Squaregain and get setup quite quickly and buy your trust. AIM, OFEX and I think (don't quote me) foreign shares are not allowed in ISAs. I think this restriction is being relaxed some time soon.

I don't really have any views on the wisdom (or otherwise) of a tracker at this point in time, but personally I prefer investment trusts to unit trusts. Just my personal preference.

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acwalker,

Thanks very much, that makes sense. I'm not going to invest 4K into a maxi isa, I'll add a monthly 'savings' figure to it. I'm unsure if I've 'missed the boat' on investing in unit trust funds (Japan, Europe etc), but thought 100 quid a month aint gonna hurt me.

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Well I'm all signed up now. £50 each for 6 funds - is that diverse enough?

Pacific, Japan, Europe and North America type funds.

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acwalker,

Thanks very much, that makes sense. I'm not going to invest 4K into a maxi isa, I'll add a monthly 'savings' figure to it. I'm unsure if I've 'missed the boat' on investing in unit trust funds (Japan, Europe etc), but thought 100 quid a month aint gonna hurt me.

OzzMosiz, if you are planning on investing on a monthly basis then it might be worth checking out the providers directly.

For example, Foreign and Colonial (F&C) have the largest investment trust in the UK (they also do unit trusts). Buying direct from them costs something tiny like 5p per month (plus stamp duty). I'm not sure if this is a flat rate or if it depends on how much you want to invest. You can also wrap their trusts in an ISA. You might want to check them out (F&C).

There are many others that do this sort of thing, like Alliance and possibly JP Morgan, Merrill Lynch etc too.

It might be an idea to try to find out what you want to invest in first and then see if you can do it direct with the provider and save on the dealing costs. Dealing costs are very important if you're buying in small chunks. Buying £100 a month with a normal broker would cost you something like £12.50 per month on trading fees plus stamp duty. That's an instant 12.5% drop in your investment.

Check out TrustNet for masses of info on UK collective investments (unit trusts, investment trusts, OEICs etc.).

It's also worth bearing in mind that the tax advantages of ISAs have been eroded by the removal of dividend tax credit by Brown. Therefore you are only really sheltered from capital gains tax now, for which you have a large annual allowance for anyway (£8k or thereabouts?).

This can mean that for safer investments, starting from scratch (i.e. no previous ISAs) you are almost sure to actually save a grand sum of zero on your tax bill.

My thinking, therefore is to use my ISAs for riskier stuff for which capital gains might be a problem (in the future at some point!). Remember, of course, that AIM and OFEX are, for the moment, off-limits in ISAs, which is where you are likely to find the real risky stuff, if you are into that.

The other benefit I see of ISAs is that it can simplify your paperwork a good bit if you have to do a tax return, because you don't report anything in an ISA on tax returns.

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Well I'm all signed up now. £50 each for 6 funds - is that diverse enough?

Pacific, Japan, Europe and North America type funds.

It's certainly diverse. Remember that there's diversification already simply by going for collective investments, all dependent on what you choose, of course.

Is that £300 a month in total?

My own thoughts are that Japan is due a recovery (which already started spectacularly this year). I am also keen on Germany due to their avoidance of the global HPI phenomenon and also that they have probably put the worst of the reunification problems behind them. Also their dislike of debt and the fact that they are the number one exporter appeals. I'm also keen on Switzerland and the Scandanavian countries and possibly certain parts of Eastern Europe, e.g. Czech Republic. I am not keen on France, Spain or Italy, but I haven't really thought much about it. Holland is probably good.

I think Russia has huge potential but they really need to try to sort out the corruption or at least stop it getting any worse.

I don't trust China and I think India is possibly quite vulnerable since they've taken the tech route as opposed to China's manufacturing of consumer stuff.

I have always been pro-America but their debt problem is huge. I keep meaning to try to compare it with Japan's in the 80s. I'm sure there's still lots of money to make but it's not for me any more.

As for the UK, since it is the market I know best the risks are less than the US, although some of the problems are the same.

All just my own opinions and NOT investment advice, of course.

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Guest wrongmove

Went with Legal & General as I can swap and change investments as and when on the fly.

Yep 300 a month

Me too ! I took just 4 x £50 spread around UK, the East and pharmaceuticals. Charges are very low, so you get huge diversification with no extra costs at all. You would need to invest really serious money to do this with individual shares.

If you fancy a small "side-bet" on single shares, check out Halifax's Sharebuilder account (not an ISA)

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Well I'm all signed up now. ?50 each for 6 funds - is that diverse enough?

Pacific, Japan, Europe and North America type funds.

There's a high correlation between indices even if Japan is doing well just now

Look at CF Ruffer Equity and General

Explanations in previous threads and i'm not going to do it again

HTH

FP

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For example, Foreign and Colonial (F&C) have the largest investment trust in the UK (they also do unit trusts). Buying direct from them costs something tiny like 5p per month (plus stamp duty). I'm not sure if this is a flat rate or if it depends on how much you want to invest. You can also wrap their trusts in an ISA. You might want to check them out (F&C).

The other benefit I see of ISAs is that it can simplify your paperwork a good bit if you have to do a tax return, because you don't report anything in an ISA on tax returns.

The F&C ISA charges a £60 managment fee even though their normal savingings plan doesn't. http://www.fandc.com/privateinvestors.asp?pageid=3.3.5.3. I'm currently looking to move my investment from F&C for this reason.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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