Your money queries
Oct 24 2009 by Iain Laing, The Journal
Your money queries are answered by Peter Rutherford, senior director of Rutherford Wilkinson Ltd, independent financial advisers.
Q: I am thinking about getting on the property ladder and understand that there is stamp duty to pay. At what level does this occur?
A: Once the purchase price hits £125,000 there is a minimum stamp duty rate of 1% which is payable on completion. However, until the end of the year, the stamp duty threshold has been raised to £175,000. This could be extended but it is best to assume that this is not the case. The key is to exchange contracts before the end of December.
Q:My wife is due to give birth soon. I understand that we will receive some money from the Government. What is this and what we might expect?
A: Firstly congratulations and I hope the birth goes smoothly. You will be entitled to a Child Trust Fund payment which is an initial figure of £250. There will be a further automatic payment of £250 when the child reaches age seven. Those in less-well-off households may benefit further. The fund cannot be accessed until the child is 18 and at that point it becomes their money. You should take independent advice as to where your child’s funds are placed.
Q: I am looking to invest some money and take advantage of the fact that we have an ageing population. Which fund would you recommend?
A: Your approach is referred to as thematic investment. On the face of it you would be wise to try and take advantage of the trend of longevity and a fund that has been around for a long time is the AXA Framlington Health Fund. It was managed by Anthony Milford from 1989 to 2005 and generally had a good record. However, it was always considered to be quite volatile.
Since Milford’s retirement it has been managed by Deane Donnegon but her performance overall has been worse than her peer group. She is an active manager attempting to pick appropriate stocks and there is no evidence of any benefit in this. As an alternative you could purchase an Exchange Traded Fund that buys all the companies in that sector in proportion to their market capitalisation. An example would be the iShares S&P Global Health Care Sector Index Fund. There is no stock picking and therefore no chance of outperformance of the sector as a whole, but also no underperformance. They are also a lot cheaper than actively managed funds.
To request a free “Investor’s Guide” and with any questions you would like answered please contact me at Rutherford Wilkinson Ltd, Northumbria House, 21/23 Brenkley Way, Blezard Business Park, Newcastle, NE13 6DS. Website www.rwpfg.co.uk. Telephone (0191) 217-3340 or email peter.rutherford@rwpfg.co.uk
Rutherford Wilkinson Ltd is authorised and regulated by the Financial Services Authority.
