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ISA 2012: how our fund tips did last year

We're launching ISA 2012 to help you choose good funds to invest in an individual savings account before 5 April. We start with a look at how the funds we highlighted from Citywire Selection did last year.

 
ISA 2012: how our fund tips did last year

The end of the tax year is fast approaching and it’s time to give some thought over where to invest your ISA allowance.

Citywire Money is launching its ISA 2012 series looking at some of the funds chosen by our independent Citywire Selection team.

For more information on Citywire Selection and the funds it recommends read our guide: 'Citywire Selection: our guide through the investment maze'.

You can currently invest up to £10,680 into a stocks and shares ISA. This will rise to £11,280 in the new tax year starting 6 April. 

For further information on ISAs read our guide. Or you can watch this video: 'The ISA explained once and for all'.

What's coming in ISA 2012

On Monday we will set the scene with a look at how some of the best fund managers divide their investors’ money between shares, bonds, commodities and cash.

Then every day over next week we will highlight three-to-six of our favourite funds in each of the following areas:

  • UK Growth & Smaller Companies
  • Equity income
  • Bonds
  • Global shares and commodities
  • Asia Pacific and emerging markets
  • US & Europe
  • We will also have a special short list of starter funds for beginner investors.

There will also be features on investment trusts and ethical funds.

How did we do last year?

But we start with a review of how our 2011 ISA tips performed.

It was a difficult year for investors. In the 12 months to the end of January the FTSE World index fell 1.6% and the FTSE 100 shed 2.5%. Of course those small declines mask huge swings. After rallying in the first part of the year markets plunged on fears about the impact the eurozone debt crisis. However, since the European Central Bank unleashed its first wave of cheap money for banks in December markets have bounced back again.

All the funds we chose last year can be found on our ISA 2011 page. As they were all taken from Citywire Selection they all have good or reasonable longer-term track records. How did they do since we tipped them?

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30 comments so far. Why not have your say?

sgjhaghsdg

Mar 02, 2012 at 13:00

Picking funds is always a bit of a lottery. Some reckon they have the skills to invest in those that will outperform, but the majority of people also reckon they are better than average drivers.

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joe stalin

Mar 02, 2012 at 13:49

why not pick your own stocks at least you dont end up paying someone else to lose your money

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John Osborne

Mar 02, 2012 at 14:19

Joe,

Good for UK but not so easy in the wild west overseas.

But agree this just shows that Citiwire are no better than the rest of us and still have a lot of (in my opinion) dog funds in their selection.

Have I missed their overall gain or loss when all funds added?

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joe stalin

Mar 02, 2012 at 15:09

John agreed I was just referring to the uk where i feel comfortable investing. not sure about oveseas perhaps with the exception of mainstream europe having worked in Russia and Africa i am not sure that the lack of corporate governance is worth the investment risk and i dont really feel that funds specialising in these areas necessarily have any more of a clue than anyone else and that what gains some of them have had has been litlle more thn momo investing luck rather than a clear understanding of some of the underlying and fundemental issues. many have lost badly in asia and some of the other more exotic markets of late..

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Maverick

Mar 02, 2012 at 15:19

Er - why just funds? Why not select a parallel ISA from investment trusts, and see which performs better?

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Clive B

Mar 02, 2012 at 15:49

Joe

I use funds as I don't have the time/interest to research sufficient stocks to give myself as wide a spread as I can get off-the-shelf via a fund.

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rich banker

Mar 02, 2012 at 16:03

who needs funds?

The charges and hidden expenses kill them.

Just buy a spread of blue chips, have some cash deposits, property and spread the risk.....! Take divis when you get old and retire, before then re-invest. Doing in an ISA makes sense unless charges are high so check...

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peter hart

Mar 02, 2012 at 17:12

Over the past 5 years I have made an after tax return on my shares and corporate bonds of 6..3 % Original investment intact.

My return on NSI Index linked bonds is 5.5%

Ask for my recommendation then it has to be the NSI (no risk, well not much) and no grey hairs if you have any.

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Luckycontrarian

Mar 02, 2012 at 17:30

Why not a happy marriage between stockpicking in the UK and accessing index funds / ETFs for the wider global multi-asset world - you can still take advantage of mispricings/momentum/value buying ETFs and they trade like a share but with no stamp. Might be useful for Clive B as well for the UK, holding the FTSE100 / Allshare / 250 - works out much cheaper than the traditional fund. I use exactly this - fixed income ETFs and individual UK equities for my SIPP and ISA, it's working pretty well so far...

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sgjhaghsdg

Mar 02, 2012 at 18:17

NS&I linkers are great, and we tend to take out four (two each and two each in trust for the other) whenever they let us, but long term (and I do mean multi-decades!) equities tend to return 4% above inflation whereas linkers are only around 1% above.

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No one in particular

Mar 02, 2012 at 20:12

Luckycontrarian - ironically, if the portfolio had only invested in ETFS Physical Gold (one of the selections from 2011) it would have made about 30% in the same 1 year period.

The next best selection was M&G Optimal Income with about 8%.

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david rogers

Mar 02, 2012 at 23:14

yet again I find myself both agreeing with and doing the same as sgjhaghsdg but how many other people know about the fact that a couple can double up their holding in each linker issue very simply by buying in trust for one another .NS&I seem to keep it pretty quiet. I was possible to get the "in trust" application forms at the post office but this is no longer the case.

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KRich

Mar 03, 2012 at 09:49

This shows once again that a monkey with a pin can pick a successful fund as easily as a so-called expert.

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Tony Peterson

Mar 03, 2012 at 13:07

I am totally in agreement with rich banker.

Note that any investment that is not up 5% in the year is a real loser (to inflation).

I have been hammering on here for some years now about the value locked up in UK equities with high yields and global exposure. Most of my portfolio's yields are more than keeping up with inflation.

In case anyone is interested in my take on this, last week my wife and I added to our holdings in Vodafone (at 171) and United Utilities (at 603).

These seemed to us last weekend to be best buys. There are plenty I would be willing to buy in the week ahead. I think that Sainsburys, Vodafone, Astrazeneca, and National Grid are the best buys for the coming week. It will be different, no doubt, next week when we have some big dividends to place.

That is with income in mind. For growth potential, I rate Lloyds, Antofagasta, BHP Billiton, and Rio as buys. All of which we currently hold.

It is going to be important for us this month as we still have some way to go to cash in our CGT exempt gains for the tax year soon ending.

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John Osborne

Mar 03, 2012 at 13:46

Tony Peterson,

This is all very well if you have the skill to pick the right shares.

Some people just have not the time ability or inclination to pick individual shares, so it is a question of finding a reliable expert advisor or manager. Easier said than done. Plenty of diverse information advice and hype from the retail fund industry, but what to chose.

In the end everyone has to be responsible for their own investments, or choice of managers, and at least sites like Citiwire help the research.

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Tony Peterson

Mar 03, 2012 at 14:03

John Osborne

In my opinion a "reliable expert adviser" is an oxymoron. And "advisor" is a misspelling. And the existence of any" reliable expert manager" has to be thrown into doubt by the crap performances (almost all loss makers" in Citywire's last years choice picks.

Surely everybody knows who charges them for water, electricity, gas, food, medicine? You don't have to pick anything. They are the right shares.

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Forestbhoy

Mar 03, 2012 at 16:02

Agree with the above comments,why not just invest in the stocks that the funds contain and leave out the middle man in charge of the fund...?

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John Osborne

Mar 03, 2012 at 16:49

Tony Peterson,

Sorry mistake, yes it should have been spelt "adviser". (bracket missing in your third sentence).

Lloyds Bank, Marconi, BT, C&W, Bank of Scotland, Northern Rock etc. were the "right shares" for many, considered solid reliable companies giving reliable dividends until they crashed.

SSE United Utilities and most other utilities are good dividend payers possibly until the next regulator review. All Utilities carry high debt levels which may or may not be sustainable in the future which could affect share price and dividend. AstraZeneca is now suffering because of lack of new medicines. etc..

Anyway, the point I am making is that some time and skill is needed in picking and maintaining a portfolio of individual shares, and the portfolio ideally should be large and diverse enough to stand one or two failures. Someone with some degree of expertise has to look after this. You and I may have at least some of the skills, but not all people have, or they may not chose to spend their time this way.

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peter hart

Mar 03, 2012 at 17:01

Thanks for the NSI Trust info. Been investing in linkers for 10 plus years and never knew that. Will give it a go when they next issue.

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Tony Peterson

Mar 03, 2012 at 17:50

John Osborne

Thanks for pointing out the obvious - whenever I get a bit pedantic I always screw something up - in this case hitting the quote mark instead of close brackets. Serves me right. But ever since Adam Werrity I see red when "adviser" is misspelled.

However, and as one singed a little with Marconi, and ( in spite of my most persuasive attempts at EGMs and AGMs) down on Lloyds (but I think LBG is still now probably the best recovery play on the market). I find it interesting that you chose BT as a bad example ( we took up the initial offer, kept until it reached an unsustainable £11 or so, took profits ,and started to buy back when it was trading at a little over £1. Currently BT is showing us a total return of over £100,000 profit over the years, as well as providing excellent phone and broadband services, and dividends - to my gratified surprise. It isn't on my buy list, but I am happy to hold.

For most people, however, I think it can be historically and mathematically demonstrated that those who go it alone by buying into their water, electricity, gas, oil, and food suppliers, have done much much better than those who trusted in fund managers, pension fund providers, annuity providers, and the rest. What do you do, by the way?

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John Osborne

Mar 03, 2012 at 22:34

Tony Peterson,

Well done over the BT shares. Am sure many of the readers here wish they had done the same. If only they had kept O2.

I hold a mixture of large shares in different sectors like yourself for income, some small companies, and trusts (mostly ITs) for overseas diversity, including 10% commodity and gold.

The only utility I have, however, is SSE, and have to admit over the years it has done quite well.

I would have done a lot better without losses on Lloyds, C&W and Marconi, the latter two were my dotcom caualties.

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fammorris

Mar 04, 2012 at 08:56

In the case of Income Funds what's the point of assuming that the income from the funds was reinvested, not withdrawn? Income after all is what many investors look to these funds for!

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an elder one

Mar 04, 2012 at 11:35

Possibly, as a matter of interest; according to my Chambers Dictionary 'advisor' is now an acceptable alternative to 'adviser', though not in a 1980 Shorter Oxford I note. Is there some subtle distinction, one wonders apart from a user's familiarity.

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John Osborne

Mar 04, 2012 at 13:05

fammorris,

I agree. The figures published by most sites including Citiwire and IFAs for performance of these funds nearly always includes income reinvested. This biases upwards the often pedestrial performance of these funds and hides the effects of the 1.5-2% expenses. I think this is wrong and as you suggest, a far fairer picture would be for both sets of figures. Then at least if you have to chose one of these funds rather than direct investment you can see clearer which managers are adding longterm value in their stock selection as well as the income.

ElderOne,

Thanks, I do not mind being reminded of my mistakes, a sensitive issue these days, but better to learn from other peoples'.

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kenneth douglas

Mar 04, 2012 at 13:07

I again notice, in your article, how selective you have been, with no mention of r other (Citywire) recommendations. Artemis Strategic Assets Retail - First State Greater China Growth - Invesco Perpetual Distribution.

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an elder one

Mar 04, 2012 at 15:11

I don't embrace funds in equities in general, except to get a spread in a particular domain; eg, Black Rock Gold and General, some ETFs, India, Russia, Berkshire Hathaway B, and the like. From casual observation it seems there are as many funds as there are equities in the market place, so logic suggests to me it just as difficult to choose there than it is to select specific equities; I think people put misplaced trust in funds, apart from anything else. My instinct in general terms is to put money into things of a strategic nature, eg, raw material in all its forms (mining, oil, and earthly produce) and companies that have proved able to corner the market (for the time being). I like a combination of growth, yield and security (gold and silver) and hold long term not < one year. I guess those who go for funds either don't have the time or any inclination to think about industry.

I confess though I've barely yet made up for losses in 2011 (approx 9%); another 3.7% on and I'll be there.

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an elder one

Mar 04, 2012 at 15:28

I should have added also well established business affording a sustained high yield.

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John Osborne

Mar 04, 2012 at 17:49

Elder One,

You do not have to feel so bad.

You have beaten Fidelity Special Situations by one or two percent, but are underperforming M&G Recovery by about 5%.

Assuming you have taken 5% income, this means you also should also be drawing a £100K salary plus bonuses having matched or outperformed the stars supported by their nodoubt also highly paid analysts.

I have only done a few percent better, both of our savings values have been hurt by the Blackrock Gold and General Fund which has lost 15% in that time, despite the 20%+ increase in gold price.

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satish mittal

Mar 05, 2012 at 01:00

I afraid the performance of Citywire's Selection, all put together is appaulling to put it mindly. I will infuture take these recommedations with pintch of salt.

Sorry

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WH

Mar 29, 2013 at 19:34

I normally use the Hargreaves Lansdown site to research funds and am some what bemused by the performance of their "Wealth 150" funds. With all their knowledge and research they struggle to out perform the man in the street. Can only conclude that fund picking is more of a lottery than most will admit. Also surprised how well UK funds are doing at the moment - seems to bear little relationship to the economy!

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