S Isa - help me trackers or EFTs

medindexer · 20 March 2017 at 8:49PM

I have money with a broker (Tilney/Bestinvest) and pay for my managed funds (containing a basket of funds at a moderate risk level)
I have about 4K to invest and would like to purchase fund with just a little more risk and have little idea what to get. I had thought of purchasing a tracker fund or an exchange traded fund (with cheap charges), tho I'm not sure what EFTs are and if it matters anyway.
What I'd like to know is if you have of these funds to recommend. Should one get a FTSE 100 tracker (and I don't know if FTSE 100 are all UK funds or worldwide - I think I'd rather invest in something covering the world market just in case UK economy suffers badly under Brexit uncertainties.
As u can see, I'm not very understanding of the whole thing (which is why I've put most of investments in a basket of funds that are all managed by bestinvest.

Any advice on quality/good value suitable trackers (intermediate risk) . I see ones by HSBC and L&G etc.). Any advice or recommendations would be appreciated. Thanks

Bravepants · 20 March 2017 at 10:09PM

Hello,

Check out the Passive Investing section of monevator.com.

P

EdGasket · 20 March 2017 at 10:24PM

iShares Core MSCI World UCITS ETF: SWDA
or
Vanguard FTSE all world: VWRL

You need to buy them through a sharedealing service.

bowlhead99 · 20 March 2017 at 11:13PM

medindexer wrote: »

I have money with a broker (Tilney/Bestinvest) and pay for my managed funds (containing a basket of funds at a moderate risk level)
I have about 4K to invest and would like to purchase fund with just a little more risk

Any advice on quality/good value suitable trackers (intermediate risk) .

It depends on what you consider to be intermediate and what sort of thing you want to track. If you take a global equities tracker such as FTSE All-World you should not be surprised if it were to lose 40-60% over a one-to-two year period. Is that OK?

Most people would call a global equities tracker like that 'high risk', but I guess in some sense it is 'intermediate' because it is not as high risk as something that tracks just a single industry sector (like biotechnology) or a single country (like India) where the loss potential would be more like 80% over a year or two instead of 'only' 50%+. However, these are all much much higher risk than "a basket of funds at a moderate risk level".

Are you trying to buy something higher-risk to drag your whole overall portfolio (including the new £4k) up to intermediate level, or just to buy one fund on its own for £4k that has an intermediate risk level? Either way, you'd need to define what you mean by 'intermediate' in order to get any suggestions. In some sense, your existing 'moderate' allocation is already an intermediate stage between low risk and high risk.

I had thought of purchasing a tracker fund or an exchange traded fund (with cheap charges), tho I'm not sure what EFTs are and if it matters anyway.

There are no EFTs. You mean ETFs (exchange traded funds which are traded live on a stock exchange hundreds of times per minute during business hours). Follow the link in the post above to find out more.

Should one get a FTSE 100 tracker (and I don't know if FTSE 100 are all UK funds or worldwide - I think I'd rather invest in something covering the world market just in case UK economy suffers badly under Brexit uncertainties.

FTSE 100 is an index representing the largest 100 UK-listed companies ranked by their market value with money invested proportionately to the companies' market value (so you would have 40x as much in Shell as you'd have in Royal Mail).

Due to the way it is structured it has a large proportion of your money focussed in just a few companies and a few industries such as oil, banking and big pharma companies with other industries completely missing (like technology stocks such as Google or Facebook, or car manufacturing etc etc). It is not actually very focussed on the UK economy as these are generally big multinational companies.

You are probably right to go for a global fund rather than a fund investing in just one country and a restricted set of industries. However, if you are looking for something truly 'intermediate' I am not sure what to recommend, because most global equity funds would be considered higher risk. The whole point of index tracking funds is they track a set index of financial instruments with similar characteristics (such as large global companies) and are not by their nature, multi-asset allocated. So volatility will be a lot higher than the average return on your existing 'moderate' portfolio.

medindexer · 21 March 2017 at 8:43PM

I think my answer to all your points is that I'm just looking for low charge ISA (low charge I guess means a tracker or ETF0). With regard to risk level, I mean low risk is low in terms of the investments (stocks and shares) - lowest risk is bonds etc and highest risk is where you are 100% equities in the most volatile areas (geographically and things like technology).
So if someone comes in and says I want to invest 4K in stocks and shares and I want to put it in what is considered the medium/average risk of for stocks and shares investments. I am prepared to leave it for at least say 10 years so that any major plunges have a decent chance of recovery.
Is that clear?
If you have any particular funds that would suit this, do let me know.
Cheers

AnotherJoe · 21 March 2017 at 9:22PM

medindexer wrote: »

I think my answer to all your points is that I'm just looking for low charge ISA (low charge I guess means a tracker or ETF0).

No, it doesnt. You've confused the management fee for the platform with the management fee fior each fund/etf etcs

With regard to risk level, I mean low risk is low in terms of the investments (stocks and shares) - lowest risk is bonds etc and highest risk is where you are 100% equities in the most volatile areas (geographically and things like technology).
So if someone comes in and says I want to invest 4K in stocks and shares and I want to put it in what is considered the medium/average risk of for stocks and shares investments. I am prepared to leave it for at least say 10 years so that any major plunges have a decent chance of recovery.

VLS40 or 60 then. 40 less riskier than 60 but arguably for 10 years, 40 is too low risk
Is that clear?
If you have any particular funds that would suit this, do let me know.
Cheers

As above. Note that the charges for an ISA are dependent upon how much you have invested in what type of fund or share (it could be different for shares, funds, etfs, etc) there are various websites that will tell you what the chargers will be but take into account your chosen fund/ETF.

Glen_Clark · 22 March 2017 at 8:55AM

EdGasket wrote: »

iShares Core MSCI World UCITS ETF: SWDA
or
Vanguard FTSE all world: VWRL

You need to buy them through a sharedealing service.

I'm happy with both of those (sold one and bought the other to use up Capital Gains Tax allowance.
VWRL works out a bit more costly, both in fees and reinvesting the dividends - dividends are paid in US dollars which is a fee to convert to Sterling, then another to reinvest the dividends. Wheras SWDA is an accumulator where dividends are reinvested automatically.
But VWRL covers a wider index.

medindexer · 23 March 2017 at 3:05PM

I'm aware now that there are 2 main costs, the fund itself and the management (management is what your broker like HL or Bestinvest charge yes?)
But all the peripheral information you mention (which is great to understand I'm sure), is way beyond me. I simply can't be a self-selector. I'm aware if things like having to consider if a particular broker has a flat fee management charge or fixed or varying %age. But it's too much for me to compute. Which is why i asked my question tho I'm aware giving a simple answer is hard.
So, I'll risk asking it again. All things being roughly equal (and i know things like management charges aren't equal), can u suggest what you'd pick for someone with 4k, to invest that's in the medium risk area of investments (bonds and equities).
I do like by the the sound of those vanguard 20 to 80. Are they as easy to buy as any other fund (i read something some months back about vanguard and not being able yet to buy them direct in UK).
My investment service is Bestinvest so something that they handle would be great. Thanks for your patience.

cashbackproblems · 23 March 2017 at 5:21PM

Above over complicates it a bit. It is simply a tracker you want such as Vanguard or if taking more risk go for a European Equity or EM tracker. I am not invested in FTSE at all as think it is quite high and will fall with brexit.

Via HL you can pay 0.08% for the on going fund charge and 0.4% for their charge so 0.50% all in which is good.

AnotherJoe · 24 March 2017 at 6:38PM

medindexer wrote: »

I'm aware now that there are 2 main costs, the fund itself and the management (management is what your broker like HL or Bestinvest charge yes?)
But all the peripheral information you mention (which is great to understand I'm sure), is way beyond me. I simply can't be a self-selector. I'm aware if things like having to consider if a particular broker has a flat fee management charge or fixed or varying %age. But it's too much for me to compute. Which is why i asked my question tho I'm aware giving a simple answer is hard.
So, I'll risk asking it again. All things being roughly equal (and i know things like management charges aren't equal), can u suggest what you'd pick for someone with 4k, to invest that's in the medium risk area of investments (bonds and equities).
I do like by the the sound of those vanguard 20 to 80. Are they as easy to buy as any other fund (i read something some months back about vanguard and not being able yet to buy them direct in UK).
My investment service is Bestinvest so something that they handle would be great. Thanks for your patience.

You can buy Vanguard through most (all?) major platforms in the UK.
Look them up on Bestinvest and see. Presumably they have a search option?

S Isa - help me trackers or EFTs

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