FUND Types Explained - Which Is BEST For You?

[@MeaningfulMoney]

Should I make Part 2 of this video? Let me know below and tell me if you found this one useful. Also, here's a link to the video I mentioned: Investing Made Simple - kzbin.info/www/bejne/noLLfq2IabF9hM0

[@dougteesdale8492]

Yes please to part 2

[@keithplummer8214]

Very informative but it seems you have scarcely answered the question you included in the headline. Please do make a Part 2, but please go beyond just a factual description of the different fund types and actually go into depth about the ways in which each might be useful for investors and, crucially, why. It’s the practical uses of these fund types that viewers would be most interested in. Thanks.

[@neilmackie2935]

For Part 2 you could include Investment Trust Preference Shares.

[@craigross341]

I've done okay out of investment trusts but I've been planning a move to simple etfs to reduce charges. So I sold the ITs - having a fight to get decent prices because of the bargain size - and then hesitated when reinvesting. Once you're in cash the temptation to not pull the trigger is there. So the market went up, I finally bought, then it clipped down. It'll take me four years to make back in reduced charges what I lost fannying about.

[@jam99]

Easily done. I appreciate your honesty. One of the biggest messages from financial advisors is not try to time the market. I try to remind myself of this, and sometimes I listen!

[@petercoombes3340]

Yes Part 2 please. This was an excellent clear and concise review of the investments discussed. Part 2 - Preference Shares, Bonds. Active/Passive ,VCT.

[@OliTaylor]

Thanks Pete, banging my head on my desk trying to get R02 done. Dual-pricing is throwing me off!

[@kevinoxley7488]

Hi Pete, When I watch your videos I realise just how little I know about investments - The more videos like this the better. I always hit the like and save button too, as they are just so informative. Thank you!

[@MeaningfulMoney]

Thank you, Kevin - great to have you here! 🙏🏻

[@lf2109]

Pls make a part 2 about funds- what are pros and cons/best investment combinations/watch outs/risk level for each type of funds ? thanks

[@MeaningfulMoney]

Noted, L Feng, thank you! And thanks for watching!

[@richjohn11]

Hi Pete! Please do a part 2; looking forward to it!

[@leesmith9299]

i'd like a video explaning how ETF's are open ended even though you trade them like other shares. on the face of it i would have thought sentiment would effect the ETF share price like it does IT's and so they could trade at discounts / premiums. But i'm guessing something clever is going on in the background to make them open ended and preventing them veering too far away from NAV.

[@maltesetony9030]

Good clear overview of the main options.

[@MeaningfulMoney]

Cheers Tony!

[@patoises]

Thank you very informative. Now that you have explained the technical distinctions, can you please do a video explaining when and why one would choose one over another. For example I am now invested in OIECs, but under what circumstances should I consider ETFs instead? Does the decision purely depends on administrative factors like costs and liquidity, which you touched upon, or are there more significant financial factors one should consider?

[@adrianlester5149]

+1 for what Patios suggested - when and why to purchase one over another.

[@davidnichols9824]

Very much enjoying these videos and you should definitely do a part 2. I am also interested in what the different classes mean in funds, class A all the way through to class Z and is one type better or more riskier than another.

[@kwameakom2625]

Hello Pete, just a quick thank you, the through library of podcasts you have made are extremely practical, truly life changing 👌🏽

[@MeaningfulMoney]

Thank you so much, Kwame! I’m delighted the show has been helpful for you 🙏🏻👍🏻👊🏻

[@alexgold4965]

Good stuff mate !

[@MrRoyck10]

Part 2 please, thanks for sharing.

[@MeaningfulMoney]

Cheers, CK - watch this space…

[@garycroft8213]

Its a really interesting but difficult topic to get to the bottom of - thanks for attempting to demystify! I've been doing my own research for some time as I'm building wealth in the UK, but intend to live/work in Ireland and then retire somewhere bit warmer - I'm also intending to hedge my bets on UK pension LTA by building wealth across multiple countries or even amalgamate UK/Ireland state pension to a Euro one. Firstly I came across the synthetic nature of some of my ETF's which I didn't like, so moved to real ETF's but I found these tend to be domiciled in Ireland (due to Ireland 15% dividend tax withholding vs 30% for other countries). This is OK for now but I intend to transfer to OEIC before relocating to Ireland (but keeping a UK home for later on) as they have a deemed disposal of ETF's every 8 years @40% of gain. An OEIC is UK domiciled and under non-dom status wouldn't be subject to CGT unless remitted. I think alot of people might be surprised how wrapped ISA's can be taxed in other countries. OEIC's seem to have higher charges but for the most part still seem fairly liquid and perform as well as ETF's. I'm not entirely sure why for the most part people would favour one over the other except of cost. My plans might be a bit more complex than most but multi-country living with the blurred nature of these investments is an absolute minefield, and will catch some people with nasty surprises...

[@onthebeachinsitges]

How come the fund managers publish so little information? If I invest in a listed company, they are subject to detailed disclosure requirements. But if I invest in a retail investment fund, nada. I can read Morningstar's views but I have almost no knowledge of what I am in

[@anonanon6938]

Really helpful video to scratch surface of understanding fund types, but i'm still confused by when you would choose an OEIC vs and ETF. If ETFs are cheaper than why would anyone go for an OEIC (for a passive index tracker fund)?

[@neilholdcroft9503]

Hi. Thanks very much for the fantastic videos. I have a topic suggestion. How about an episode covering how various sources of income in retirement will be taxed. For example, covering income from a pension vs drawdown from an ISA vs drawdown from a unit trust investment / other sources of income - how are each treated from an income tax vs capital gains tax vs other tax (?) perspective or are they taxed on both income tax in addition to capital gains tax? Hope that makes sense. Thanks again!

[@MeaningfulMoney]

Thats a great idea, Neil - i'll add it to the list, thank you!

[@PeteMulv]

@@MeaningfulMoney I would look forward to this one as well, great videos, thanks.

[@markbaldry3426]

Thank you, Pete. Another really useful and excellent video. Yes, I think doing Part 2 would be very helpful, particularly if you delved into the regulatory protection offered to each of these investment vehicles. I have also been told ETFs can be more volatile than OEICs (ETFs presumabely are the domain of programme traders and the DIY investor), which may make them best avoided by the feint hearted - is this true in your view?

[@mypointofview1111]

I'd like to know more about REITs and the other property investments. I don't think enough is known about them.

[@MeaningfulMoney]

Noted, thank you 🙏🏻

[@SavvyMoneyShow]

Another issue with synthetic etfs if you remember the copper squeeze last year a well known synthetic etf suspended trading and reset the etf rather than tracking during high volatility

[@MeaningfulMoney]

That’s a very good point, thank you for sharing.

[@davidkeith8425]

A part 2 please Pete

[@stanleywarburtonart]

I'm all for Part 2 as well. If you produce another one please include your view on the fact that many ETFs are held offshore (eg Ireland) and not covered by the UK FSCS. I own and like ETFs but this is a risk that worries me.

[@TheRobaber]

Thanks for the video. Is there any difference in risk between holding an index fund and holding a physical ETF of an index fund?

[@bevanpaul1]

This is about the podcast not the video but there’s no comments on podcasts :( Love the podcast and the new this or that series. I had a comment on the overpay or invest one which might be an interesting discussion point for you? I overpay alongside investing and used to set this to reduce term, just as you say in the podcast. After a while I realised that there might be a more optimal strategy. Now I have it set to reduce payments but keep the same term. In fact I extended my term to the maximum I could. BUT I continue to pay the same total amount as I was before (basic+overpayment). This means I have to up my overpayment every month as the basic reduces. Why? I realised that I could achieve the same goal (pay off my mortgage early and save interest) BUT also reduce the risk I was carrying if my income fell. This means I have a lowering basic payment which I would have to cover through income, insurance, or similar if I had a cut to income. I also now have a very large ‘overpayment reserve’ if it really came to that which is now a multi-year multiple of my basic payment, again more risk mitigation. To do this you need a mortgage which allows big overpayments (otherwise you risk hitting a penalty) and a lot of self discipline to change the overpayment every month but I feel I’m getting the best of both worlds: a shorter mortgage term AND a lower payment. Just an alternative approach you and Roger might find of interest!

[@MeaningfulMoney]

That is an interesting approach, but I totally understand your logic. I love it when people are intentional, think things through and then take action, so kudos to you for that 👊🏻. Thanks for the comment too, I do wish there was a place for podcast comments, other than the show notes of course…

[@davidlloyd3116]

I have a Tatton Core General Investment Account, made up of shares heavily diversified across the globe, and a Stocks and Shares ISA in the same account portfolio. I wonder what type of investment this is?

[@MeaningfulMoney]

Hi David. Remember that the GUA and the ISA are merely the accounts. It’s what’s inside them that you need to know. Quite likely a combination of individual stocks and funds, but I can’t know for sure.

[@davidlloyd3116]

@@MeaningfulMoney Yes its a very diversified stocks and shares portfolio, but hasn’t been doing so well last 2 months. Probably because of inflation, rising prices and the war in Ukraine.

[@0702gjh]

Great video, please can we have a part 2 . I know you have to be careful but an example of each different type of investment would be helpful. Thanks for these helpful video’s

[@MeaningfulMoney]

Noted, thank you!

[@craigross341]

Anyone owning property open ended funds is IMHO crazy. A closed end vehicle (Foreign and Colonial Commercial Property Trust, for example) just goes to a big discount to net asset value if idiots panic. An open ended fund with lots of panicking investors at the start of Covid either has to shutter the fund (preventing redemptions) or sell a property in a collapsed market to meet the redemptions.

[@boombustinvest]

What would you say is the main difference between an ETF and an Index Fund?

[@MeaningfulMoney]

The structure, but also in the way they are traded. An ETF can be bought and sold every second if the trading day and the price fluctuates throughout the day, like a share. A tracker fund (assuming an OEIC structure) is only priced once a day.

[@mattlm64]

I thought ETFs were only open to authorised participants.

[@MeaningfulMoney]

Nope. I own some myself!

[@mattlm64]

@@MeaningfulMoney I meant open-ended, so only authorised participants can create and redeem shares.

[@samdelvalle374]

Super difficult. The more I study investing the less I know. No wonder only a few make money.

[@joshuat1535]

Synthetic usually have better tracking of an index and you often avoid dividend taxes. Also they also can hold a substitute basket of equities. They exchange the returns of those equities in return for the index returns with a counterparties. If the counter party fails to pay up, the fund can keep the basket they have and they are usually high quality equities. Counter party risk isn't unique to synthetic ETFs. Physical ETFs can loan your shares to short sellers and that introduces counter party risk too. I wouldn't rule out synthetic myself.

[@dmitrybelyakov]

Your intro sequence is always painfully loud.

[@dmitrybelyakov]

Loving your channel otherwise :)

[@MeaningfulMoney]

Noted, Dmitry - we’ll look into that