Chartwell ISA Portfolios – ideas for your tax-efficient investing

As of early October the over 50’s will be able add a further £3,000 to the current £7,200 limit on stocks and shares ISA investing.  Chartwell Direct offers 4 ‘ready wrap’ ISA Portfolios offering investors a collection of unit trusts and OEICs for varying investment objectives and styles.  This article looks at how they have performed recently and the current opportunities available for investors.

As we have mentioned before, the current state of the UK economy makes a very good case for sheltering your savings and investments from tax charges.  As a reminder, Public Sector Net Debt stood at £798.8billion* at the end of June 2009 – a rise of £157.4billion from the same month last year.  This accounts for 56.6% of the UK Gross Domestic Product (GDP), and suggests that tax charges are on the horizon for the next few years.  The Chancellor has already started reducing tax breaks on pensions in this years Budget and we believe that this is a mark of what is to come.  There has probably never been a better time to protect your savings from future tax hikes.

Investing in a stocks and shares ISA is one of the easiest ways to protect your investments from income and capital gains tax.  With the exception of dividends on UK equities there are no tax charges on income received or capital gains.  You can save up to £7,200 per annum in an ISA, and a further £3,000 from the 6th October if you are 50 or over at this date.  

With a fund universe of several thousand the task of identifying an appropriate collection of investments for your stocks and shares ISA can be quite a daunting one, however it is crucial a portfolio is chosen which matches your objectives as an investor.  At Chartwell Direct we help make this process easier by offering 4 ‘model portfolios’, aiming to match investors varying attitudes to volatility and preferences for income, capital growth or both.  Our clients began investing in these Portfolios in March this year, as featured in our ISA Portfolio 2009 magazine (request a copy here). The most recent performance of these Portfolios is outlined below.  Please view the factsheets below for up-to-date information on the underlying funds and asset breakdown of each Portfolio.  In addition, our ISA Portfolio 2009 section of the website contains further information.

High Income Portfolio – 0% initial charge

At time when returns on cash deposits are at an all time low, this portfolio offers investors who are prepared to accept an element of investment risk an appealing level of income along with the opportunity for capital growth over the longer term.  The portfolio has performed well recently, largely attributed to the strong surge in the price of corporate and government backed bonds which make up around three quarters of the portfolio.  It has returned 9.5% over the past 3 months and is currently delivering a net annual yield of 5.7%**.  We believe that, despite this increase in the capital value of corporate bonds and gilts over recent months, these investments still offer good value with further opportunity for growth over the long term and appealing income yields.

FACTSHEET

Income & Growth Portfolio – 0% initial charge

Equity income is a popular sector for investors looking for long term growth and income, and this portfolio offers a well balanced and well diversified collection of robust funds.  It is well positioned to take advantage of any recovery in the equity markets and also is currently generating a healthy level of income, paid out on a monthly basis.  The current net annual yield is 5.6% and the portfolio has returned 7.2%** over the past 3 months.

FACTSHEET

Growth Portfolio – 0% initial charge

With a collection of ‘growth’ managers underlying this portfolio, this diverse investment aims to take advantage of capital growth opportunities over the long term by investing in equities across the globe.  We have seen an 8.3%** growth in this portfolio over the past 3 months and believe it remains a good investing opportunity for those looking to long term capital growth and are prepared to accept the volatility associated with the stockmarket.

FACTSHEET

Adventurous Growth – 0% initial charge

In the same sense as the Growth Portfolio is dominated by equities across globe, this portfolio is also heavily backed by international and UK based stocks and shares.  However this portfolio aims to deliver long term capital growth from a collection of funds with an emphasis on investing in specific markets or sectors.  Investors may experience more volatility as the portfolio invests in emerging markets, commodities and potentially undervalued stocks, however, for those looking to the longer term, this portfolio offers strong potential for capital growth.  The portfolio has benefited from the strong surge in equity prices over the past 3 months, and has returned a capital gain of 10.3%** over this period.

FACTSHEET

Of course investing in any collection of funds requires an understanding of the inherit risks of doing so – investment values can go down as well as up and income yields are variable and not guaranteed.  However, for those who are willing to accept this risk, and understand their own objectives regarding income, capital growth and volatility, we believe these portfolios continue to offer a promising investment opportunity for consideration in investors’ ISA holdings.

If you would like to invest in any of our portfolios please click here to download an application form, or alternatively call our Investment Helpdesk on 01225 823915 to request one to be sent to you by post.  Our investment experts are also on hand 9am – 5pm Monday to Friday to answer any questions relating to the underlying funds within these Portfolios and ISA investing in general.


*source: www.statistics.gov.uk
**source: financial express 2009, 14/05/09 – 14/08/09