That blog would concern me if I was a client as it shows a few gaping holes in the knowledge.
That blog would concern me if I was a client as it shows a few gaping holes in the knowledge.Why’s he talking about outflows?
The whole point of an IT is that it’s a closed pool of capital that’s then listed.
1. Ever changing tax rules and UK UCITs might come under 41% rule same as Irish domiciled ETFsWhich particular cons concern you?
Thanks for your valuable inputs. The Pies are limited to 50 shares per pie, so that is a bit of an issue. Nested Pies is a new feature that they are trying to bring soon. I would like to balance through buying only, not selling.Trading 212 has investment pies with which you can sort of replicate large cap etfs. Last I looked they were limited to around 100 shares per pie, so something like the S&P500 is out, and adding/removing companies would be manual to.
The pies do have an add only rebalance function, meaning money in goes towards rebalancing instead of selling to rebalance. This is the only real option in Ireland. If you actually rebalancing via selling, the pattern and number of trades would likely cripple anyone from the calculations required for tax and Revenue might also decide you are trading enough to be classed as a professional trader.
I'm far from an expert on this compared to others on this forum, but here's my take on those points:1. Ever changing tax rules and UK UCITs might come under 41% rule same as Irish domiciled ETFs
2. Performance of the funds is in the hands of the active manager
3. High fees
4. Currency exchange risk
5. Protection of investment if the unit trust goes out of the business
UK-domiciled investment trusts are not UCITS.1. Ever changing tax rules and UK UCITs might come under 41% rule same as Irish domiciled ETFs
1. Ever changing tax rules and UK UCITs might come under 41% rule same as Irish domiciled ETFs
2. Performance of the funds is in the hands of the active manager
3. High fees
4. Currency exchange risk
5. Protection of investment if the unit trust goes out of the business
Thanks for your suggestions Jim. I agree with you. May I know which investment trust do you use? Any guide on choosing the good trust with diversified portfolios? Thanks again for your time.- Investment Trusts and UCITS are two different things
- Fees and an active manager is no bad thing if you are getting a good return. My main fund has an annualised return of 18%, does it make sense to pay an extra 0.25% if fees to get that return?
- When you invest in any multinational there are all kinds of FX risks built in, some you clearly don't even know about
- If you are concerned about safe guarding your investment, then why would go buying fractional shares which you don't own and have the underlying instruments lend out by the broker? It just does not make any sense.
Like hundreds before you, I know you will do this no matter how much advice you are given. So go with it, if you are lucky you'll end up with the money you put in or many be a little more, if not you'll have learned an expensive lesson.
I agree with all your points. Regarding point 5) if any of these investment trusts go bust like Lehman Brothers, is there any minimum protection to the investment? like 100k??I'm far from an expert on this compared to others on this forum, but here's my take on those points:
- True, but isn't this the case to an extent with any investment? Tax rules can change all the time and all we can do is play the game we're currently presented with. There's no guarantee the CGT rules will stay the same forever for single-share picks either
- A fair assessment, however this can go both ways. Managers can outperform the index too (and if you read their materials, most claim that they do). I found this article comparing the Polar Capital Technology Trust with the Allianz Technology Trust. One reason it states for the relative underperformance of the former is that it is more wedded to the index
- Hard to argue with this. I would imagine you'd rack up a fair few fees maintaining your own "ETF" as well though?
- Unless you're buying shares in companies that operate in Euros only, you're always going to have this
- This feels like a fairly remote possibility. Some of these funds have been around 150 years
Eh, no.Regarding point 5) if any of these investment trusts go bust like Lehman Brothers, is there any minimum protection to the investment?
Okay. I am reading that trading 212 has some money protection as written in the below link. Do you think it is of any better protection than investment trusts offer. It might be a dumb question, but I am new to all of these.Eh, no.
We are not allowed to discuss individual instruments here. But if you do some research you should be able to find some interesting ones.Thanks for your suggestions Jim. I agree with you. May I know which investment trust do you use? Any guide on choosing the good trust with diversified portfolios? Thanks again for your time.
Here, in the case of investment trusts working similar to ETFs (i.e. holding the stocks of other companies). In that situation, if they go bust, I expect there should be some mechanism to protect the investor, isn't it? Like if Vanguard goes out of business, there should be some protection right? or am I wrong with my assumptions?Your broker may be covered by a compensation scheme (ie if the broker itself goes bust) but the investment trust won’t be covered.
Similarly, if you invest directly in the stock of any other company that goes bust you won’t be covered by any compensation scheme.
Lehmans and an investment trust are completely different things. An investment trust, an ETF or similar financial instrument can't go bust in the same sense as the likes of Lehmans. But it can suffer a serious loss due to it's investment strategy, leverage, synthetic instruments and a who series of other issues.I agree with all your points. Regarding point 5) if any of these investment trusts go bust like Lehman Brothers, is there any minimum protection to the investment? like 100k??
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