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When it comes to managing his own money, David Parkinson, 42, would rather leave decisions about asset allocation or fund selection to a professional. For a number of years Parkinson has used a discretionary investment management service, and has been happy with the returns to date.
He says: “I prefer to pay for someone else to make these decisions on my behalf. I’ve don’t want the responsibility of making the wrong decision.” He says he appreciates this is more expensive than going down the DIY route, but he believes these fees are worth paying for superior, and more consistent returns.
Parkinson, an internal auditor from London, has worked for a number of different financial companies over the years. “As far as I see it they are professional people. My future livelihood depends on the research they undertake and the advice they give.”
He says in his experience much of the returns depend on the asset allocation, and he prefers to leave such fundamental decisions to someone else. But when it comes to saving for his own children, Parkinson says that at present it is not cost effective to use a wealth management service.
Investing for Children
Parkinson has twins, a boy and a girl, aged four-years old. He says: “We don’t need a high level of diversification at the moment, so I was looking for an equity fund that will hopefully grow to be a reasonable nest-egg for them.”
He did not open these accounts when the twins were born, but after receiving money from relatives for Christmas and birthday presents, he was looking to invest these gifts.
“There doesn’t seem much point keeping this money in the bank,” Parkinson said. “Interest rates are terrible. We don’t need this money at present so it seems to make sense to invest it for our children’s future.”
At four-and-a-half years old, the twins have only recently started school. Parkinson says leaving school may still seem a long way off, but he’s aware how expensive life can be for young people today; whether it’s paying for higher education, or getting a rung on the housing ladder.
With this in mind he wanted to open a Junior ISA for each of the twins, saying: “By the time they take control of these Junior ISAs they will hopefully have a reasonable pot of money that will at least help towards these costs. I’m hoping it will give them a bit of a head start.”
Picking a Fund
When it came to choosing a fund, Parkinson opted for Orbis Global Equity Fund. Deciding which fund to is not always an easy task; there are more than 3,000 open-end funds and around 500 closed-end funds to choose from. Parkinson says the Orbis fee structure appealed to him. Most investment fees charge an annual fee, but Orbis has a performance fee, which is only levied if it outperforms its benchmark.
Parkinson says: “I was looking for a global equity fund. These are long-term investments so we can afford to be fully invested in equities.”
Morningstar research shows that this global equity fund has consistently delivered decent returns, since its launch in 2005. As a result, it has a five-star performance rating.
William Gray is the named manager on this global equity fund, but the fund is managed using a team-based approach.
Regular Saving to Boost Returns
Parkinson says that as well investing the twins’ birthday and Christmas money he is setting up a regular direct debt to help the fund grow. Parkinson says that although they have only held the investment for less than a year they have been happy with the results and says he is opening an ISA for both himself and his wife which will invest in the same fund.
“At a later date we will look to add other funds to diversify across asset classes,” he says.
