INDIVIDUAL SAVINGS ACCOUNTS (ISAs)
About Us
Logic Investments is an independent advisor
providing stockbroking and investment
management services to private investors,
pension trusts and corporations.
Our approach is client focused: we aim to
provide tailored and objective investment
advice and investment management services
to help our clients achieve their investment
goals.
We strive to provide our clients with a high
level of service that is built on trust and
fairness.
Contents
Individual Savings Accounts (ISAs) ........ 05
Our ISA Advisory Service ......................... 07
ISA Portfolio Models ................................ 09
Speculative Portfolio Model ................... 11
Adventurous Portfolio Model ................. 13
Balanced Portfolio Model ....................... 15
Cautious Portfolio Model ........................ 17
Our Adventurous and Speculative ISA
Portfolio Models should only be used as part
of a balanced portfolio. Therefore you must
seek advice from a qualified adviser who will
advise whether this service is suitable and
appropriate for you.
03
Individual Savings Accounts (ISAs)
What is an ISA?
Individual Savings Accounts (ISAs) were
introduced in April 1999 to replace old-style
tax free savings.
There are two most commonly used types
of ISAs:
Those that you save cash into known as
cash ISAs
Those that you keep investments in known
as stocks and shares ISAs
Logic Investments offers an online ISA facility
giving you full control at the touch of a button.
Our ISA can be used for both advisory and
execution-only services.
The advantages of ISAs
What sets ISAs apart from other savings and
investment accounts is that they come with
significant tax benefits.
The interest you make on cash savings or the
gains from investments are tax-free up to the
annual limit. Because of their tax benefits,
ISAs could help your savings and investments
grow faster over time.
Stocks and shares ISAs have the added
advantage of helping safeguard you from a
potential Capital Gains Tax (CGT) bill in the
future. CGT is a tax on the gain you make
when you sell or dispose of assets such as
investments.
Can anyone have an ISA?
You need to be 16 or over to open a cash ISA
and 18 or over to open a stocks and shares ISA
and you must be ordinarily resident in the UK.
Junior ISAs are available if you would like to
invest on behalf of a child.
How much can I save into an ISA?
For the 2016/2017 tax year the ISA allowance
is £15,240. The Junior ISA allowance is £4,080.
You can invest your ISA allowance fully as
stocks and shares, cash, or any combination
of the two.
Why choose a stocks and shares
(Investment) ISA?
People often choose stocks and shares ISAs
because they are looking for a better return
from their savings than cash can provide.
In a cash ISA the pace your cash grows at will
depend on the amount of interest you get –
and this of course is the big challenge for cash
savers at the moment because interest rates
are still very low. Inflation can also erode the
spending power of cash if prices rise faster
than your savings grow.
Stocks and shares ISAs are designed to hold
investments rather than cash and, over the
longer term, investments do have the potential
to deliver much higher returns than cash –
although returns from investments are a lot
less predictable and therefore there may be
losses and capital is at risk.
What to consider
Are you willing to take any risks with your
money?
With a cash ISA, the money you pay into the
account is protected by the Financial Services
Compensation Scheme (FSCS). When investing
you need to be willing to take some risks with
your money because investments can go
down in value as well as up. This means you
could end up with less money in your stocks
and shares ISA than you first paid into it. But,
as we’ve already said, with investing there is
also the potential to make far greater returns
than cash.
How long are you planning to keep
your money tied up for?
It’s generally understood that it’s not wise to
invest for the short term so if you think you’ll
need quick access to your money, a cash ISA
is probably a better option. With a stocks and
shares ISA, you should be prepared to leave
your money invested for at least three years
and ideally around five years.
05
Our ISA Advisory Service
Whether you are an experienced investor
or new to the stock market, our tailored ISA
Advisory Service could play a key part in
the development of your portfolio. Our ISA
Advisory Service allows you to take advantage
of our knowledge and expertise but reserves
the final decision for you, keeping you in
control.
Our advice is as individual as each client.
That is why when you decide to use our ISA
Advisory Service we will provide you with a
Personal Investment Advisor.
Your Personal Investment Advisor will assess
your investment objectives, risk profile and
also take into consideration any particular
interest, ethical position or goal you may
have; to ensure that the investment advice
provided is bespoke and suitable for you. You
will be advised not only on single transactions,
but on your portfolio as a whole. This includes
looking at the wider issues that may affect
your portfolio such as asset allocation,
diversification and risk exposure. Your advisor
will also keep you informed of any economic
factors that may affect your investments and
will advise you accordingly.
Benefits Of Logic Investments
ISA Advisory Service
Logic’s comprehensive ISA Advisory
Stockbroking
service
includes
the
following benefits:
Bespoke trading ideas and strategies
Advice on when to place a trade and
when to avoid one
Dedicated Personal Investment Advisor.
Investment advice tailored to your
investment objectives and risk profile
Ongoing advice, based on your portfolio
as a whole
Ability to view and monitor your portfolio
on-line, in real-time
Competitive commission rates
Free Regular Research Reports
We believe that this service offers the best of
both worlds to clients who want a hands on
approach to running their portfolio but who
would like access to strategic asset allocation
models, in-house Independent research
capability and deeper investment expertise.
Crucially, we can offer perspective on the
wider issues that affect a portfolio, utilising
the views of experts.
We are finding that demand for this type of
service is high as this approach is well suited
to the current financial environment - one
where markets can be volatile and prone to
shocks. The dual attraction is that the client
is in control of investment decisions yet still
has all the benefits of having a professional
Investment Advisor involved.
07
ISA Portfolio Models
Giving You More Control
The asset allocation within a portfolio matters
as different type of assets perform differently
in different market and economic conditions.
In very general terms, riskier investments, such
as equities, should provide the best returns
over the long term, but they can also be the
most volatile. Combining different types of
investment via asset allocation in a portfolio
can help to even out these swings in value,
especially if they are “non-correlated” (i.e.
their prices move independently). This is why
it usually makes sense even for adventurous
investors to have some exposure to bonds,
even though the long term potential is less
than that of equities to help reduce the
market risk.
The Asset Allocation of a portfolio is reckoned
to account for over 90% of the returns and
has a direct impact on the level of risk. If you
have an investment time-scale of 3 years you
should take much less risk than if you have
over 20 years to make regular savings. We
use a range of portfolio models to help guide
our clients towards achieving their objectives
based on their personal circumstances.
Our valuations then show if there are any
variances with the model.
Asset Allocation
and Market Timing
Market timing usually plays a minor role in
investment performance compared to Asset
Allocation and we recommend investors
avoid the temptation to try and second guess
the markets. Contrary to popular opinion,
even professional investors cannot predict
short term market movements with any
consistency and successful investing is not
based on timing decisions. However, if you
are committing a large sum, it does make
sense to spread out the timing of the initial
investment.
Fixed income portfolio models
For investors who prefer a fixed income
rather than a variable growth portfolio model,
we provide fixed income portfolio models to
suit. These fixed income model portfolios
allocate a combination of high and medium
risk bonds to suit investors with a medium
and high risk attitude to risk who’s financial
circumstances allow their funds to be tied up
for at least three years.
The choice of portfolio model depends on
your attitude to risk, goals and investment
horizon.
Our Adventurous and Speculative ISA
Portfolio Models should only be used as
part of a balanced portfolio for those with a
high risk attitude to risk.
09
Speculative Portfolio Model
(High Risk)
25%
Global Equities
Medium Risk Bonds
25%
High Risk Bonds
Total targeted return*: 7-9% P.A.
50%
(*Before charges – see your rate card for details)
Note: The composite of the portfolio is an example and may be subject to change. This portfolio should only be used as part of a complete portfolio.
Investment Objective
Medium Risk Bonds
This high risk model portfolio aims to provide
an even split between high income and capital
growth by advising on a combination of high
and medium risk fixed income bonds and
global equities. This model is most suited to
investors who’s attitude to risk is high.
The medium risk bonds are investment
grade bonds. Investment grade refers to
the quality of a company’s credit according
to a regulated international credit ratings
agency.
Global Equities
The Global Equities segment comprises a
combination of:
1. Growth Stocks
Global larger capitalised stocks which offer
above average capital growth potential.
These companies would have a perceived
intrinsic value above their current market
price, determined by extensive fundamental
research.
2. Special Situations
Focused on taking advantage of longer term
share trading opportunities that have been
identified as offering growth potential. This
can be based on company results, technical
analysis, macro-economics, geopolitical
pressures, sentiment, and fundamental data.
Usually there is a lesser risk of default for
the medium risk bonds compared to the
high risk bonds. Therefore the recommend
allocation for the medium risk bonds is
larger compared to the high risk ones to help
control the total risk within the portfolio as a
whole.
High Risk Bonds
High risk bonds are non-investment grade
bonds and therefore the probability that
the company will repay its issued debt is
deemed to be speculative.
Therefore the recommended allocation for
the high risk bonds is smaller compared to
the medium risk ones to help control the
total risk within the portfolio as a whole.
High risk bonds usually pay a larger rate of
return compared to the medium risk bonds
to attract speculative investors.
11
Adventurous Portfolio Model
(Medium High Risk)
45%
Global Equities
Medium Risk Bonds
High Risk Bonds
20%
35%
Total targeted return*: 6-7% P.A.
(*Before charges – see your rate card for details)
Note: The composite of the portfolio is an example and may be subject to change. This portfolio should only be used as part of a complete portfolio.
Investment Objective
Medium Risk Bonds
This medium-high risk model portfolio aims
to provide a high income and some growth by
advising on a combination of high and medium
risk fixed income bonds and an allocation in
global equities. This model is most suited to
investors who’s attitude to risk is mediumhigh.
The medium risk bonds are investment
grade bonds. Investment grade refers to
the quality of a company’s credit according
to a regulated international credit ratings
agency.
Global Equities
The Global Equities segment comprises a
combination of:
1. Growth Stocks
Global larger capitalised stocks which offer
above average capital growth potential.
These companies would have a perceived
intrinsic value above their current market
price, determined by extensive fundamental
research.
2. Special Situations
Focused on taking advantage of longer term
share trading opportunities that have been
identified as offering growth potential. This
can be based on company results, technical
analysis, macro-economics, geopolitical
pressures, sentiment, and fundamental data.
Usually there is a lesser risk of default for
the medium risk bonds compared to the
high risk bonds. Therefore the recommend
allocation for the medium risk bonds is
larger compared to the high risk ones to help
control the total risk within the portfolio as a
whole.
High Risk Bonds
High risk bonds are non-investment grade
bonds and therefore the probability that
the company will repay its issued debt is
deemed to be speculative.
Therefore the recommended allocation for
the high risk bonds is smaller compared to
the medium risk ones to help control the
total risk within the portfolio as a whole.
High risk bonds usually pay a larger rate of
return compared to the medium risk bonds
to attract speculative investors.
13
Balanced Portfolio Model
(Medium Risk)
55%
Global Equities
Medium Risk Bonds
High Risk Bonds
15%
30%
Total targeted return*: 5-6% P.A.
(*Before charges – see your rate card for details)
Note: The composite of the portfolio is an example and may be subject to change. This portfolio should only be used as part of a complete portfolio.
Investment Objective
Medium Risk Bonds
This medium risk model portfolio aims to
provide a medium-high level of income
and some capital growth by advising on a
combination of high and medium risk fixed
income bonds and an allocation in global
equities. This model is most suited to investors
who’s attitude to risk is medium.
The medium risk bonds are investment
grade bonds. Investment grade refers to
the quality of a company’s credit according
to a regulated international credit ratings
agency.
Global Equities
The Global Equities segment comprises a
combination of:
1. Growth Stocks
Global larger capitalised stocks which offer
above average capital growth potential.
These companies would have a perceived
intrinsic value above their current market
price, determined by extensive fundamental
research.
2. Special Situations
Focused on taking advantage of longer term
share trading opportunities that have been
identified as offering growth potential. This
can be based on company results, technical
analysis,
macro-economics,
geopolitical
pressures, sentiment, and fundamental data.
Usually there is a lesser risk of default for
the medium risk bonds compared to the
high risk bonds. Therefore the recommend
allocation for the medium risk bonds is
larger compared to the high risk ones to help
control the total risk within the portfolio as a
whole.
High Risk Bonds
High risk bonds are non-investment grade
bonds and therefore the probability that
the company will repay its issued debt is
deemed to be speculative.
Therefore the recommended allocation for
the high risk bonds is smaller compared to
the medium risk ones to help control the
total risk within the portfolio as a whole.
High risk bonds usually pay a larger rate of
return compared to the medium risk bonds
to attract speculative investors.
15
Cautious Portfolio Model
(Medium-Low Risk)
50%
Global Equities
Medium Risk Bonds
25%
Low Risk Bonds
Total targeted return*: 3-4% P.A.
25%
(*Before charges – see your rate card for details)
Note: The composite of the portfolio is an example and may be subject to change. This portfolio should only be used as part of a complete portfolio.
Investment Objective
Medium Risk Bonds
This medium-low model portfolio aims to
provide a medium level of income and some
capital growth by advising on a combination
of low risk income and medium-low risk fixed
income bonds and an allocation in global
equities. This model is most suited to investors
who’s attitude to risk is medium-low.
The medium risk bonds are investment
grade bonds. Investment grade refers to
the quality of a company’s credit according
to a regulated international credit ratings
agency.
Global Equities
Usually there is a lesser risk of default for
the medium risk bonds compared to the
high risk bonds. Therefore the recommend
allocation for the medium risk bonds is
larger compared to the high risk ones to help
control the total risk within the portfolio as a
whole.
The Global Equities segment comprises a
combination of:
1. Growth Stocks
Global larger capitalised stocks which offer
above average capital growth potential.
These companies would have a perceived
intrinsic value above their current market
price, determined by extensive fundamental
research.
2. Special Situations
Focused on taking advantage of shorter term
share trading opportunities that have been
identified as offering growth potential. This
can be based on company results, technical
analysis, macro-economics, geopolitical
pressures, sentiment, and fundamental data.
Low Risk Bonds
Low risk bonds are bonds that are have
been given the highest credit rating of AAA.
AAA bonds are those considered the safest by
the international bond ratings agencies. The
rating agencies provide these evaluations
of a bond issuer’s financial strength, or its
ability to pay a bond’s principal and interest
in a timely fashion. Low risk bonds pay a
smaller rate of return compared to medium
or high risk bonds.
17
General Risk Warning
The investments mentioned in this report may not be suitable for all recipients or be appropriate to their personal
circumstances and before acting on any advice or recommendations in this report, clients should consider whether
it is suitable for their particular circumstances and if necessary seek professional advice. The past performance of
any investment is not necessarily a guide to future performance. The value of shares may rise as well as fall due to,
and not just including, the volatility of world markets, interest rates, economic conditions/data and/or changes in
the rate of exchange in the currency in which the investments are denominated. As stocks and shares are valued
from second to second, their bid and offer value fluctuates sometimes widely. You may not necessarily get back the
amount you invested as your capital is at risk if you invest.
Bonds
Bonds are issued by companies, public institutions and/or governments. The value of a bond will fall in the event of
the default or reduced credit rating of the issuer. Similarly, an increase in credit rating (or narrowing of credit spreads)
can lead to capital appreciation.
Bonds are, inter alia, subject to the following risks:
Counterparty risk: If the issuer of bonds is partially, or in total, unable or fails to honour its obligations, the investment
may suffer a corresponding loss. As secured financial instruments, covered bonds, address this risk.
Inflation risk: If inflation and/or inflation expectations increase, then the value of the investment may decrease and
the investor may ultimately suffer a loss.
Risk of changing interest rates: The market interest rate is material for the value of a bond, because bonds might
become less economically attractive in times of increasing interest rates and, thus, decrease in value. If sold before
maturity, the owner may suffer a loss.
The risks factors stated above do not cover all the risks of investing in bonds.
Exchange Traded Funds (ETFs)
Exchange Traded Funds (ETFs) are investment funds, similar to unit trusts and OEICs but they are traded like shares.
ETFs closely track the performance of an index and as such their value can go down as well as up and you may get
back less than you invested. Also, past performance is not a reliable indicator to future performance.
The value of an ETF may be affected by market values, interest rates, exchange rates, volatility, dividend yields and
issuer credit ratings. These factors are interrelated in complex ways, and as a result, the effect of any one factor may
be offset or magnified by the effect of another factor. You should ensure that the ETF meets your own objectives and
circumstances, and consider the possible risks and benefits of purchasing the ETF
Alternative Investment Market (AIM)
This is a market designed primarily for emerging or smaller companies. The rules of this market are less demanding
than those of the official List of the London Stock Exchange and therefore carry a greater risk than a company with a
full listing. With AIM shares there is often a big difference between the buying price and the selling price. If they have
to be sold immediately, you may get back much less than you paid for them, and you may have difficulty in selling
them at a reasonable price and in some circumstances it may be difficult to sell at any price. The price may change
quickly and it may go down as well as up.
Contact Us
London Office
Logic Investments Ltd
43-45 Portman Square
London
W1H 6HN
United Kingdom
Tel: +44 (0) 203 1378585
Logic Investments Ltd is Authorised & Regulated by the Financial Conduct Authority (516459)