I just transfered my ISA to Invest Engine so I basically have a lump sum in my cash ISA.
The savings plan/auto invest is great for automatically depositing from your bank account monthly for example, but there is no way to do this if you have a larger amount sitting in your cash from say an ISA transfer and want it to drip a set amount into the portfolios of your choosing over the year.
Please correct me if there is a way of doing this, but from what I can see there isn’t a way unless you use your bank account as the source of funds.
The workaround I’ve used in the past within an ISA portfolio is to use the cash buffer - set it up to, say, £20K initially (for a new £20k ISA) and then nothing gets invested. Reduce by e.g. £1667 each month when you want the drip feed to go in. Its completely manual so you have to remember/decide when to change the cash buffer.
(I was doing this before they had the separate ‘ISA Cash’ portfolio, so was putting the cash directly into the ISA portfolio on day one. You still can, which is why I don’t really see the point of the separate ‘ISA cash’ portfolio).
Alternatively, invest it in a money-market fund like CSH2 initially (so you are getting some growth on your ‘cash’ waiting to invest), then each month change portfolio weightings and then rebalance to move funds from the MMF into what you want. Again, not automatic, you have to decide if it’s worth the effort, and maybe have a monthly reminder on your calendar or phone.
Final option - swallow hard and invest it all on day one - research suggests that 67% of the time you will end up with more growth due to the additional time invested. (Personally I’ve generally drip-fed!)
Hey thanks for the reply! You’d think this would be an option, maybe a drop down when you set up autoinvest and do like £200 into 5 different portfolios until the funds are gone. I assumed that was what the Cash ISA portion was for and auto invest but it’s not quite so.
So weird you said that about CSH2 as that did cross my mind to add Lyxor at say 95% and then start decreasing the weight gradually, but yeah seems like alot of effort and could get stung by bid ask spread which I’ve seen others talking about here with Lyxor.
I think I will do what you say and just invest manually by putting it in my calendar, but this does go against the set an forget strategy I was trying to do (as I have a tendency to overthink)
If you do the cash buffer thing you mentioned, does it automatically invest evenly across all portfolios where it’s enabled?
Remember though, you aren’t getting any return on what is sitting in cash, so factor that in when comparing to the alternatives.
The ultimate set and forget, not over thinking it decision, is to just to put it in all in one go, rather than drip feed. As @drc says, the analysis indicates that will beat drip feeding 67% of the time, and the remaining 33% isn’t a slam dunk either.
I’m glad I did that a few months back TBH!
But before that, I just had equities and CSH2 in the same portfolio, and then sold CSH2 each month. It’s a little bit of a pain (it’s a 2-3 step process over a couple of days, as you can’t do it in a single go), but a calendar reminder did the trick.
Putting your pots in separate portfolios is even more of a pain than that though! So i’d avoid doing that if you want it to be convenient.
@mikea - not sure (if we’re talking about the same thing) - If I have auto invest switched on, its at the portfolio level, so invests any cash (less the buffer) at your target weights within that porfolio. I don’t think it uses the ‘general cash’ as part of the auto invest, but as I never leave any cash in the General Cash account I don’t really know.
@drc Yeah I think my suggestion makes the General cash alot more useful, at the moment its fairly pointless other than holding cash outside of the portfolios. It would be much better if you can set up auto-invest to work from General Cash to throw a set amount each month into select portfolios, then if the auto-invest is on in those portfolios then it would get invested automatically. This way you can drip into the market and never have to go on the app, which is the problem I’m trying to get away from (too much interaction makes me overthink)
@CycloneRepair Thanks for reply and great advice. I always said I wouldn’t try to time the market but here I am. I think it’s because the market is currently at a crazy high and when your dealing with large amounts it’s really going to seem drastic if the markets plunge. I know nobody knows the future but it really is uncomfotably high for me to feel confident dropping 30k in one go. If it was steady like it was end of 23 I don’t think I’d question it, but it just feels like it’s doing some crazy climbing at the moment.