Moneyspider in the News

Revamp your investments for a wealthier future

Reuters

Consolidating underperforming investments, including individual savings accounts (ISAs) and personal equity plans (PEPS), into a funds-of-funds could be a solution. Fund-of-fund managers aim to build portfolios of "best of breed" funds, ensuring diversification and monitoring fund performance.

But because there is an extra layer of fund manager costs, this often proves more expensive then going down a single-manager route.

The average single-manager fund costs around 1.5% in annual management charges, while the average fund-of-funds costs investors 2.44%.

But with the rise of technology, it is becoming increasingly easy to monitor fund performance yourself. Independent online fund ratings provider Moneyspider.com, for example, ranks fund management groups based on the percentage of "A" and "B" rated funds each has in their respective stables.

It monitors and ranks the 2,000 unit trusts and open-ended investment companies available to British retail investors and rates them against funds in the same sector, all funds, returns on the FTSE 100 and cash yields.

Alan Steel, chairman of Alan Steel Asset Management, says: "Good investment management is about continually monitoring what's going on'. Switches should be free of charge and normally tax free: on that basis it makes a great deal of sense."

"Let's face it, there's plenty of evidence to show different investments are more sensible at different points of the economic cycle, and there are also crashes from time to time. Keep your eyes on these things, on the market, and being prepared to switch at the right time might be the one thing you can do to protect your wealth."