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Where do I move my high risk CTF to?

Investment discussion for beginners. Why you should invest your money, get help getting started
Souljim
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Where do I move my high risk CTF to?

#393797

Postby Souljim » March 9th, 2021, 9:07 am

We took out a CTF when my daughter was born and she’s now 12. Hadn’t realised at the time but we invested in a high risk fund (Invesco Perpetual Income 1) which is 100% equity based. 90% of this is in UK equities and the balance in global equities. This tanked at the beginning of the pandemic and is now worth 20% less than what we’ve invested (circa £4K). It’s currently sat with Foresters Financial who charge a management fee of 1.66% which I know is high. There seems no point moving to somewhere really safe to get no growth as I’m just protecting the loss but equally leaving it where it is doesn’t seem right either.

If I’m going to continue to invest say £50 a month into the fund until she’s 18 what should I do?

A - Leave it where it is and move it when the equity market recovers to something safer for the last 5 and a bit years?
B - Move it to another 100% equities fund with the same split (90% UK/10% Global) with lower fees and ideally more successfully managed.
C - As for B but diversify the equities across more countries so there’s less reliance on the performance of the UK market. Would this dramatically impact the returns potential?
D - None of the above. All ideas and options welcome.

Thanks Folks

vagrantbrain
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Re: Where do I move my high risk CTF to?

#393815

Postby vagrantbrain » March 9th, 2021, 9:55 am

I've got to say that an overall return of -20% over the last 12 years is shockingly bad, even allowing for their high charges :shock:

I guess a lot would depend of where you think the UK market might go over the next 5 years - the last 5 have been mediocre for a number of reasons including brexit uncertainty, lower oil and commodity prices and the relatively concentrated mature constituents. Could the conclusion of Brexit lead to a resurgence and a period of growth, or another 5 years of mediocre returns? Who knows.

Have you got anything in mind for the money like uni fees or house deposit? If nothing in the short/medium term i'd be tempted to get a cheap all-world tracker and just let global capitalism do it's thing without worrying too much about country or sector allocation. A couple of the larger global ITs could also be suitable however I think the fees and dealing costs might be high for a relatively small balance.

Urbandreamer
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Re: Where do I move my high risk CTF to?

#393841

Postby Urbandreamer » March 9th, 2021, 11:18 am

A lot depends not only upon your intentions for the money, but your attitude to investing and what you see yourself teaching your daughter about the subject.

I suspect that, given you have ignored the CTF, you may have little interest in the investing process. If this is the case then Vanguard do JISA's and their tracker etf's (especially their world tracker) have a good reputation with the passive investment crowd.

I took a different approach with my two youngest opening JISA's for each with A J Bell when they were 14 and 17. I selected two investments for each of them and helped them select a third. My daughter got quite interested, my son, not so much.

In case you are interested the mix was.

1/3 City of London IT.
1/3 Scottish Mortgage IT
My daughter picked Associated British Foods (Primark)
and my son
Frontier Developments (a games company).

Financially they have not done at all badly, though the portfolio mix has changed in the last 3 years.

fisher
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Re: Where do I move my high risk CTF to?

#393898

Postby fisher » March 9th, 2021, 2:02 pm

You can transfer your CTF to a JISA. CTFs are discontinued and you'll probably get more reasonable annual charges and a lot better investment choice by transferring to a JISA. There are numerous JISA providers, and you can buy a whole range of investments such as trackers, other funds and individual shares.

Vanguard do a cheap JISA if you only want to consider trackers.
I use Youinvest for my kids' JISAs as it allows me to mix and match different Investment Trusts.
There are other providers worth looking at too I am sure

Souljim
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Re: Where do I move my high risk CTF to?

#393944

Postby Souljim » March 9th, 2021, 5:09 pm

vagrantbrain wrote:I've got to say that an overall return of -20% over the last 12 years is shockingly bad, even allowing for their high charges :shock:

I guess a lot would depend of where you think the UK market might go over the next 5 years - the last 5 have been mediocre for a number of reasons including brexit uncertainty, lower oil and commodity prices and the relatively concentrated mature constituents. Could the conclusion of Brexit lead to a resurgence and a period of growth, or another 5 years of mediocre returns? Who knows.

Have you got anything in mind for the money like uni fees or house deposit? If nothing in the short/medium term i'd be tempted to get a cheap all-world tracker and just let global capitalism do it's thing without worrying too much about country or sector allocation. A couple of the larger global ITs could also be suitable however I think the fees and dealing costs might be high for a relatively small balance.


Hi and thanks for your response. The money could help to buy her first car or potentially towards her first house. I don’t think she’s university material but will hopefully be proved wrong! I had considered the cheap global index trackers and was watching some videos that someone had recommended on another thread last night so could go for that. I could leave it all in equities which I assume is what your suggesting but just spread it globally as opposed to having a big chunk in the UK.

Souljim
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Re: Where do I move my high risk CTF to?

#393957

Postby Souljim » March 9th, 2021, 5:30 pm

fisher wrote:You can transfer your CTF to a JISA. CTFs are discontinued and you'll probably get more reasonable annual charges and a lot better investment choice by transferring to a JISA. There are numerous JISA providers, and you can buy a whole range of investments such as trackers, other funds and individual shares.

Vanguard do a cheap JISA if you only want to consider trackers.
I use Youinvest for my kids' JISAs as it allows me to mix and match different Investment Trusts.
There are other providers worth looking at too I am sure


Hi and thanks for your response. Yes Foresters Financial took on the CTF when they stopped about 4 years ago and I only really started to pay attention to it when it tanked at the beginning of the pandemic. It seems pointless transferring something that’s lost 20% of its value into a fund that’s only ever going to show minimal growth so I want something that has a similar growth potential but that’s more diversified so hopefully less risky and reliant on one particular market. I will have a look at some JISAs and see what the options are. Thanks again.
Last edited by tjh290633 on March 9th, 2021, 9:10 pm, edited 1 time in total.

Souljim
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Re: Where do I move my high risk CTF to?

#393961

Postby Souljim » March 9th, 2021, 5:38 pm

ReallyVeryFoolish wrote:For a young investor I really think that for a 90:10 split, the UK portion should be the 10% part. I echo the sentiments here, move to a far lower cost platform and go much more international. Additionally, I would forget about any fund with the word "income" in its name for young people.

RVF

Thanks RVF. Yes I’m being told how fantastic “mutuals” are who currently hold my daughters fund but fees are high and investment options limited so doesn’t feel like a good fit. Yes definitely want to go global and I might need to keep most/all in equities to get back to at least a standing start. Any fund suggestions?

fisher
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Re: Where do I move my high risk CTF to?

#393995

Postby fisher » March 9th, 2021, 6:44 pm

There is a thread here which is currently discussing some Global equity investment trusts.

viewtopic.php?f=8&t=28320

LooseCannon101
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Re: Where do I move my high risk CTF to?

#394010

Postby LooseCannon101 » March 9th, 2021, 7:12 pm

I invest in F&C Investment Trust (FCIT) which was formerly known as Foreign and Colonial. Their performance over the past 20 years has been +8% per year on average with dividends re-invested. The crucial word in the last sentence is 'average' as I would say that there is an equal chance each year of gaining 30% or losing 10%.

BMO Asset Management who manage F&C's portfolio, have a JISA savings plan (see below) which costs £25+Vat per year.

https://www.bmogam.com/gb-en/retail/pla ... ined/jisa/


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