Vanguard Alternative?

Is there any sensible alternative for an ISA provider if I simply want a world index tracker and a UK government bond option?

Fund fees are peanuts and platform fees are peanuts with no fees to drip-feed.

The only irritation is that I would like to dip into a couple of riskier funds but I'm not sure I want to pay more on the whole lot just to get that ability.
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  • Alexland
    Alexland Posts: 9,653
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    edited 27 January 2018 at 7:11PM
    Cavendish Online invested in Fidelity Index World (if that's what you really want - tracks MSCI World so 60% US....) and a L&G or Blackrock gilt fund? Personally I would prefer to have less US exposure and a more global bond exposure including corporates such as the HSBC Global Strategy series.
  • rathernot
    rathernot Posts: 339 Forumite
    Thank you but I believe their platform (Fidelity) has changed so there's now a £10 charge for buying funds/etfs

    https://www.cavendishonline.co.uk/investments/other-products/investment-trust-or-exchange-traded-product/

    Which for a monthly drip-feed could be a few hundred a year in fees.

    Unless I've misunderstood as Cavendish were first choice until I spotted that.
  • dunstonh
    dunstonh Posts: 116,027
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    Is there any sensible alternative for an ISA provider if I simply want a world index tracker and a UK government bond option?

    That is pretty poor quality investing. You havent been reading US websites and are trying to replicate it in the UK have you?

    Global tracker fair enough but having your whole fixed interest allocation in UK Gilts is undesirable.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • rathernot
    rathernot Posts: 339 Forumite
    @Dunston thank you, not US sites specifically but many passive investing ones.

    Certainly open to some options there for some global exposure but my understanding was that with something such as UK government bonds you're pretty much covered unless UK PLC goes bust in which case don't we have slightly bigger concerns?
  • Alexland
    Alexland Posts: 9,653
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    edited 27 January 2018 at 7:47PM
    rathernot wrote: »
    Thank you but I believe their platform (Fidelity) has changed so there's now a £10 charge for buying funds/etfs

    Funds are different to ETFs. It's fairly normal for most DIY platforms to charge trade fees on Shares, ETFs and Investment Trusts. Vanguard and Nutmeg are the only platforms I know that do not charge trade fees on ETFs and even they do not allow live trades for free as they batch them up.

    Normal funds are OEIC or unit trusts and my understanding is that there are no charges to trade these on Cavendish. Vanguard Life Strategy, HSBC Global Strategy and Fidelity World Index are all normal funds.

    I agree with Dunstonh that going entirely Gilts (UK government bonds) in your fix income is undesirable. If you go World with Gilts then you would be US overweight in your shares and UK overweight in your fixed income.
  • rathernot
    rathernot Posts: 339 Forumite
    @Alexland thank you, that makes a bit more sense as I see some world trackers are OEIC (Fidelity for example).

    I'm looking at global government bond funds too as I've seen that mentioned in quite a few guides.

    Still curious how UK only for gilts/bonds is risky for anything other than a doomsday scenario where UK defaults?
  • Alexland
    Alexland Posts: 9,653
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    rathernot wrote: »
    Still curious how UK only for gilts/bonds is risky for anything other than a doomsday scenario where UK defaults?

    The problem is that the market price of gilts is currently higher than the eventual redemption value as investors chase return. As such if interest rates rise then the market price will drop and investors will be left with losses even though no default had occurred.

    https://www.moneyadviceservice.org.uk/en/articles/fixed-interest-securities-gilts-and-corporate-bonds
  • dunstonh
    dunstonh Posts: 116,027
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    @Dunston thank you, not US sites specifically but many passive investing ones.

    Many of the passive sites base their data on the US. In the US it is extremely difficult for managed funds to do well. Passive makes sense. In the UK we have one of the highest ratios of success managed funds in the world. One of the reason is that UK funds are not taxed internally.

    However, the main point is that a US investor picking the S&P500 and a US bonds fund has been able to pretty much get away with very good returns doing that. So, you see passive sites often converting that to their local target market. It doesn't work well in the UK though. You wouldn't want UK gilts to form a large part of your portfolio. You would want corporate bonds, high yield bonds, index linked gilts and gilts and possibly global bonds depending on the exchange rate at the time. All but one of those is available in passive UT/OEIC form.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • rathernot
    rathernot Posts: 339 Forumite
    @Dunston thank you, to confirm I'm not looking at the S&P or anything US centric, I'm trying to keep it simple and diversified.

    I was already looking at the iShares Index Linked fund, if I added in the two below presume that brings in the mix of corporate bonds and high yield (but riskier) bonds?

    Artemis Strategic Bond Fund
    iShares Index Linked Gilt Index
    Baillie Gifford High Yield Bond Fund
  • rathernot
    rathernot Posts: 339 Forumite
    No edit button? Was going to add that if I was doing a 70/30 equity/fixed split I assume split equally between the three categories?
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