August 2017
M T W T F S S
« Jul    
 123456
78910111213
14151617181920
21222324252627
28293031  

Don’t put your savings in unit trust ‘Funds of Funds’

The most popular savings products at the moment are unit trust ‘funds of funds’. These are unit trusts which invest savers’ money in other unit trusts. This is completely stupid. Over the next 5-10 years the stock market will give returns of somewhere from 3% to 5% a year. If your money is in unit trusts, you’re probably paying up to 3% a year in charges and commissions. But if you choose a ‘fund of funds’ you have to pay charges both to the ‘fund of funds’ managers and the managers of the unit trusts where they invest your money. So you could easily be losing 4% or more a year. So how are your savings ever going to grow? Answer, they’re not.

We pay about £60m every working day to unit trust managers to look after our money – they get richer while we get poorer. If you put your cash into a fund of funds, you make even more managers richer and yourself even poorer. Don’t do it!

Comments are closed.