Hi there, just a quick question.
>
> I've sold all the shares / funds in my self select ISA and now it's all in
> cash. I don't want to keep it in cash as 1) the revenue don't like that,
> and 2) I'd like a little more growth than the few percent the ISA account > gives me.
>
> Does anyone know if there are any "guaranteed return" products I can buy
> from within an ISA? Like the Guaranteed Equity Bonds the Post Office and
> Virgin sell?
Maybe a bond fund? There are various lower risk income funds out there, but remember that bonds can get pounded in a high interest rate and inflationary environment.
Most 'guaranteed return' or 'protected' funds tend to be quite complicated, and the nature of the guarantee or protection can really vary from fund to fund. Most only 'guarantee' your capital upon certain conditions - i.e. the index has reached a certain threshold in x years time. They often have specific lock in periods.
It is quite difficult in most cases to work out whether these actually do provide good value or not. I'm never really managed to work it out.
I find the best of these type of funds (or maybe I should say the least convoluted) are the Escalator funds provided by Close Fund Management. These have 'lock-in' dates each quarter where you can opt to 'lock-in' previous gains, or else roll them over. Unfortunately, these are not available via an ISA.
As the last poster stated, if you don't wish to take risks, then a bond fund is the most suitable option after cash.
The problem you will find is that most of these 'guaranteed' or 'protected' funds do partly invest in equities, either directly, or more probably indirectly (via the use of options and other derivatives), with the capital security provided by an instrument such as a Medium Term Note.
There is a list of available Protected funds at:
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Some of these are available for investment inside an ISA wrapper.
In my opinion, if you don't want to take risks associated with equities, then don't invest in equities. While these funds may prevent you losing some capital, should the market rocket up, you will only get a proportion of the gains that you would have received than if you were directly invested in equities - because part of your capital if being used to provide the layer of 'protection'.
As you may have guessed, I'm no real fan of this type of fund.
Given that there could be more nasties on the markets over the next few months, Cash does not seem a particularly bad place to be right now.
But with the exception of Treasury 4.25 2011 all the 5 yearish bonds are trading over par meaning you are guaranteed a capital loss. This will be offset somewhat by the running yield of 7.54% (which would be subject to tax). The redemption yield (i.e. total return) is 4.68 (gross) but you would be taxed on 7.54% per annum despite only getting 4.68 effective..
Because you can "always buy gilts" inside a share ISA. It's just that they have to have at least 5 years to go to maturity.
If you think that interest rates are going to fall in the short term, you may be able to get away with a high coupon stock and not lose capital in the short term.
The interest received is usually better than for cash in a share ISA.
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