Helen Griffiths is investing for her son’s future and says she wants the family’s money to work harder, particularly with inflation rising and household bills starting to tick up
To this end, full-time parent Helen, 42, has been putting any spare cash she has into a stocks and shares ISA at the end of each month. She has also consolidated her pensions into one account to make it easier to manage.
“I think we are all worried about inflation, it’s one reason why we are invested in riskier investments, such as funds or shares, with the hope of delivering higher returns,” she says.
“The current cost of living squeezing is certainly affecting our purse strings, but we try to keep a constant amount each month going into our ISA, and treat that as a necessary bill. By thinking about it this way, and maybe cutting back on other spending, I think we should be able to keep paying a regular amount in.”
Based in Bath, Made in Chelsea
Married Bath-resident Helen now wants to diversify, and is looking at property.
“Our money is effectively losing value in the bank thanks to soaring inflation, so we have decided to invest in a buy-to-let property to complement our ISAs and pensions,” she says.
“The yields are pretty strong in this area, at around 5 to 6%, and investing in bricks and mortar feels like a safe and sensible investment given stock market volatility.
“We’re very conscious of our retirement income pot, and diversifying our investment strategy at this point in life to provide another regular income stream feels shrewd.” She and her husband are now talking to a mortgage broker about getting a buy-to-let mortgage.
While that gets underway, Helen continues to source potential investment ideas from her ISA and pension provider, Chelsea Financial Services.
“Of course investments don’t work out sometimes, and they can go up and down, but on the whole we are extremely happy with our portfolio,” she says.
“The ISA platform is extremely easy to use, and it’s also easy to talk to the staff if you need to, which is helpful.”
Investment Fund Choices
Helen is currently invested in a range of UK and global funds, including Marlborough Multi Cap Growth, Gresham House UK Micro Cap, and Rathbone Global Opportunities.
For its part, the Marlborough fund has a 3-star rating from Morningstar, and, while it outperformed both its benchmark and peer-group category over 2020 and 2021, it has fallen back against both since the start of this year. According to Morningstar data, it delivered returns of 26.5% in 2019, 7.6% in 2020 and 15.2% in 2021, but is down 20.6% so far this year.
The Gresham House UK Micro Cap is another UK-based fund, but is focused on far smaller startups, many of whose shares are traded on the Alternative Investment Market (AIM). The fund has a Morningstar Quantitative Rating of Silver. It is a much higher risk fund than the diversified Marlborough offering.
Nevertheless, Helen says taking higher risks has resulted in better returns, with the AIM-driven proposition delivering annualised returns of 6.42% over the past three years. Again, however, the strong gains of 2021 (when the fund delivered a 25.6% return to investors) have now given way to a difficult 2022, with a loss of 17.3%.
Rathbone Global Opportunities is another Silver-rated fund, at least for its lower-cost share classes (the more expensive shares classes get a Bronze ratinf). Its 5-star rating from Morningstar reflects its strong performance in in recent years against competitors and its own benchmark.
“We continue to consider Rathbone Global Opportunities as a great option for investors seeking exposure to high-growth mid- to large-cap global equities,” Morningstar’s fund research team says.
Our analysts add that it seeks to invest in companies that benefit from “endogenous” growth, avoiding businesses whose future revenue streams are dependent on external factors.
“As a result, the portfolio has exhibited long-standing under-weightings in materials, energy, telecoms, and utilities, giving it a markedly different sector profile to the FTSE World Index prospectus benchmark,” they say.
The fund has delivered excellent long-term returns, with investors seeing annualised returns of 9.44% over three years, 11% over five years and 13% over 10 years.
Fee Freedom
While their pensions are for their own retirement, Helen says she may want to use the proceeds from her ISA investing to pay for school fees for son.
“If we decide this is the route we are going to take, it’s good to know we will be able to pull on some of these funds,” she says.
“I have been investing now for about 15 years. I am glad I started saving young and was thinking about ISAs and pensions [a long time ago]. Even a small amount of money invested in a regular basis can turn into a modest amount over time, and it has certainly given our family a bit more security, which is something we value as we move into more uncertain times.”
