Have you checked the fund's annual reports/updates?Q1. if property prices and rents have risen so much in many European countries, how come the Eurozone Property fund has done the worst? It's peak was 13,600, now at 12,400? This is the worst preforming fund by a long way.
If it's the wrong fund for the investors' needs, yes.Q2. Unless there is some sort of disaster, these funds will never be encashed. If cash is required for long-term care, there are deposits available. Given that, should we do a fund switch? Get out of Eurozone Property, Eurozone Equity, Dividend Growth?
If the investment is unlikely to be cashed in then why not simply one all/mostly equity index tracker? I'm not sure what happens on death tax wise with such a fund. Maybe direct equity investments would be better since the CGT liability disappears on death?Q3. I realise there is overlap between these funds. The three mixed funds probably hold the same shares, but just in different weights with bonds. The three mixed funds hold eurozone equities, and bonds. Is there an argument to simply hold one mixed fund?
But the next 8 year deemed disposal is imminent anyway so I'm not sure what the downside to encashment and reinvestment is? But, maybe shares would be better as I mentioned above?Q4. We considered switching broker to move to a lower AMC, but this discussion has dissuaded me
Key Post - Strategy around the 8 year deemed disposal
Thanks @GSheehy - so, if I'm cashing in a unit linked fund to invest the proceeds in shares subject to CGT then I presume that the timing is irrelevant?www.askaboutmoney.com
What's the total fund worth now and if possible the value of each of the eight funds??Scenario:
Couple aged 75-80 now, both retired, combined income is 48k gross
Zurich (Eagle Star) Matrix investment bond, managed funds, started in 2007
100k initial amount, with 101% allocation, and 3.5% commission added into fund = 104.5k
AMC = 1%
Spread evenly across eight funds, 12.5k into each, as follows:
- Active Fixed Income, risk = 3/7
- Long Bond, risk = 4/7
- Balanced, holds 50-75% equities, risk = 5/7
- Performance, holds 65-90% equities, risk = 5/7
- Dynamic, holds 75-100% equities, risk = 6/7
- Eurozone Equity, risk = 6/7
- Dividend Growth, risk = 6/7
- Eurozone Property, risk = 6/7
At the eighth year, 2015, the fund was worth 150k approx., and approx. 20k tax was paid. Next deemed disposal due this year 2023.
Active Fixed Income | 18,676 | |
Long Bond | 20,067 | |
Balanced 50-75% equities | 23,114 | |
Performance 65-90% equities | 24,281 | |
Dynamic 75-100% equities | 25,277 | |
Dividend Growth | 21,153 | |
Eurozone Equity | 21,180 | |
Eurozone Property, risk = 6/7 | 12,370 |
Are you able to log into your account and get a current valuation as a lot has happened since May 22 ??May 2022 = 166k, that's after 15 years, including the effects of 20k tax in 2015.
Active Fixed Income 18,676 Long Bond 20,067 Balanced 50-75% equities 23,114 Performance 65-90% equities 24,281 Dynamic 75-100% equities 25,277 Dividend Growth 21,153 Eurozone Equity 21,180 Eurozone Property, risk = 6/7 12,370
You’re welcome. It just occurred to me that I’ve been giving financial advice for 30 years and I’ve never arranged anything execution only and I’ve never been asked to do so@Marc
Thank you very much.
I can't blame the original broker, it was execution-only, I choose the funds, I didn't know as much back then as I do now.
Yes, I understand what you mean about just one fund.
I will keep thinking about this.
Maybe because you don't advertise an execution only service?You’re welcome. It just occurred to me that I’ve been giving financial advice for 30 years and I’ve never arranged anything execution only and I’ve never been asked to do so
I don’t get your first point.Thanks to all contributors.
This discussion has helped me clarify a few points:
(1) the couple have an average tax rate of approx 10% on their earned income, and a marginal income tax rate of 20%, but this 166k slice of their savings is now stuck in a vehicle where they face a 41% exit tax on gains. Its seems we are stuck with this situation.
(2) it seems that the consensus is not to switch broker, pay exit tax, and start a whole new policy, just to save 0.35% AMC.
(3) it was my mistake to choose three mixed funds at the start. I now see that it is a choice between A or B or C, and I was foolish to choose all three mixed funds. I plan to do fund switches.
Thanks.
Because 2007 was a local peak of European property prices, and in many countries it hasn't recovered. Look at Spain:Q1. if property prices and rents have risen so much in many European countries, how come the Eurozone Property fund has done the worst? It's peak was 13,600, now at 12,400? This is the worst preforming fund by a long way.
I don’t get your first point.
Why do you think that nothing can be done about the tax differential between your marginal income tax rate and the flat rate of exit tax of 41%?
If the plan is to continue to hold equities, rather than deposits, then what alternatives are there?
It seems this wealth is meant for their heirs.This couple, aged 75-80, want less complexity in their lives, not more, so I doubt they will go for either 1 or 2.
I dont think these elderly people should be encouraged to be involved in managed funds or shares or advised to do so after saving and working hard all their lives.Perhaps State Savings or cash so that they can sleep sound and have peace of mind.Just my humble opinion.
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