Moneyspider in the News
11/12/2007
ISA holders feeling the pinch
Press Association & Regional Papers
If we are spending less on cars, carpets and restaurant
meals - as companies claimed recently to explain poor results - you might
imagine savings levels have rising ahead of storms next year.
If thrift is back in fashion, the annual allowance of
the Individual Savings Account (ISA) is an obvious place to start. It must be
used by April 5th, as a tax-free shelter for cash, shares or a managed fund.
But not a lot of money is going there either.
Figures from the Investment Management Association show
ISA sales plunging: October saw a net outflow of funds from ISAs for only the
third time since 1997, when Gordon Brown launched them, with about £31.3m more
taken out of the funds than was put in by new savers. The last ISA deficit in
November last year was only £3.1m, a tenth of the loss recorded in October.
In every tax year, anybody over 18 should use at least
part of their personal ISA allowance, which enables them to put a maximum
£7,000, held in either cash, equities or bond funds, beyond the tax net. ....
However, Tony Ahearne, of London-based financial
consultant Anthony, Bryant, says choosing equity ISAs is only part of a
successful investment strategy. Monitoring performance of ISA portfolio is
vital too, he thinks.
His company has pioneered the launch of Moneyspider.com,
a computer system to assess all 2,000 or so managed funds in an
easy-to-understand way for the average investor.
He said: 'Some fund managers deliver stellar
performances in some funds and atrocious returns in others. Take Invesco
Perpetual. An investor putting £5,000 into its Latin American fund in November
2002 is today looking at a tax-free profit of £31,035. But the same £5,000
invested in Invesco's struggling North American US Equity fund shows a profit
of just £230. You can't expect your fund manager to tell you which funds are
dogs. It is essential that investors monitor performance.'
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