Dod101 wrote:hiriskpaul wrote:I look after investments for a couple of relatives. Being cognisant of the risk of underperforming the market from choosing actively managed funds and investments I might otherwise pick for myself, I invest in cheap trackers. Global developed/Global emerging in the ratio 9:1. That way I cannot be accused of picking poor investments. I also endeavour to keep investment costs as low as possible and keep track of where they hold their cash deposits, to advise when they should switch.
In your situation I would definitely switch away from SJP as soon as possible, but taking care to avoid CGT.
Given the age and circumstances of your relative it seems likely that she will need to spend increasing amounts on care, so a large proportion of equities is highly inappropriate. I would suggest 60% at most. LifeStrategy funds are not a bad option. I don't like the overweighting of UK equities and DIY equivalents can be run more cheaply, but those are minor niggles. LS funds would be far more suitable than anything SJP have to offer.
Later on you might want to consider things like immediate needs annuities and you should definitely seek advice on this. These types of products are difficult to acquire without advice anyway.
And how are the cheap trackers results doing in relation to your presumably more risky investments over say the last five years?
Dod
Some investments are more risky, some I regard as less, but it depends which risks your are talking about. SWDA is an accumulating MSCI World tracker ETF, up about 70% over the last 5 years or about 11.3% per year. One of my safer investments over the whole period has been Co-op Group 11% Final Repayment Subordinated Notes 20/12/25, with a 5 year internal rate of return of about 8.0%. I think my best performer has been Manchester Building Society 8% PIBS, bought in December 2019 at an average price of 19.6 and currently trading at about 100. So a five fold increase in price plus a 4% interest payment and another payable soon.
The point is though, I would not have bought either investment with someone else's money. Although I would have considered the Co-op Group bond to have been much safer than a World equity tracker it still carries high specific risk, it could have gone to zero, but a World tracker is very unlikely to do that.