Date: Sat, 14 Jul 2007 23:53:35 +0100
From: GSV Three Minds in a Can 
Newsgroups: uk.finance
Subject: Re: ISA growth prospects
Bytes: 2913

Bitstring , from the wonderful 
person Kanalista  said
>I have an ISA containing both equities and bonds which has been doing well
>for eight years or so (1998 to 2006), providing income at the rate of around
>four per cent and growth at the rate of over six per cent pa. Being an ISA
>there is of course no income tax or capital gains tax to pay.
>
>
>
>I also have a portfolio run by an Independent Financial Adviser which
>similarly contains equities and bonds though not in an ISA wrapper. Its
>proportion of equities and bonds can be adjusted to put it on an even
>footing with the ISA for calculation purposes. Though not too bad in terms
>of income, this portfolio is doing much less well in terms of growth. I am
>thinking of changing my IFA, as he does not seem to be very good at getting
>growth out of my shares. Before doing so, can I confirm from anyone in this
>newsgroup that an ISA has no special "growth advantage", ie it has the
>income tax advantage and the CGT advantage, but no special "growth legs"
>that would enable it to grow faster than a non ISA portfolio.

Bonds in an ISA can pay gross interest, so you potentially get 25% more 
income than outside an ISA. No other advantages.

What did you tell the IFA you wanted - growth, or income (and have you 
been reinvesting the income, or taking it?)? Over the last few years 
smaller companies have performed particularly well, but these typically 
pay low (or no) income. Bonds have only just outperformed Cash over that 
period (and some bonds not even that good). Plus the period is uneven - 
anything invested around the 98/99 bubble might be barely back to where 
it started - technology stocks will still be well down .. anything 
invested in 2004 or 2005 should be doing pretty well (exceptions 
exist!!).

-- 
GSV   Three Minds in a Can
8,963 Km walked. 1,746Km PROWs surveyed. 31.7% complete.