Most investors have at least had money invested in a with profits fund at some point in time.
Almost everyone will have had a mixture of experiences with these funds.
In truth, we’re not big fans of them at Investor Profile. We prefer a clean, simple and low cost approach to investing. That’s just about everything a with profits fund is not.
Any fund that can have its value arbitrarily reduced at the drop of a hat surely cannot be the basis of a sound investment strategy.
Of course in the interests of regulatory requirements I should say that not all funds should be binned. Some are certainly worth keeping if they hold attractive bonus rates. Some may even have performed relatively well.
But what they do certainly represent is an old school approach to investing, and where ‘old school’ starts to appear in a sentence you know that ‘expensive’ isn’t far behind.