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Index Tracker Funds

MrCalm
MrCalm Posts: 5 Forumite
in Savings & investments
Hello,

I have recently graduated from University and would like to invest in an index tracker fund. I would like some advice from people with experience of tracker funds as to the best one to invest in?

Thanks for your time :)

Comments

  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    Depends how much you are putting in to the tracker, and where you want to invest with this tracker.
  • MrCalm
    MrCalm Posts: 5 Forumite
    The FTSE 100 would be ideal and I have around £5,000 but don't want to invest it all immediately.
  • dunstonh
    dunstonh Posts: 121,460 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    The FTSE 100 would be ideal and I have around £5,000 but don't want to invest it all immediately.

    What about the FTSE100 appeals to you despite being one of the worst performing indices for the last 20 years?

    If you have just £5000, do you think it is wise to invest in a higher risk way (single sector investing is higher risk than multi-sector investing? Could you tolerate and afford to suffer say a 43% loss in 12 months?
    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.
  • bugbyte_2
    bugbyte_2 Posts: 415 Forumite
    Part of the Furniture 100 Posts Name Dropper Photogenic
    The FTSE 100 would be ideal and I have around £5,000 but don't want to invest it all immediately.

    HSBC FTSE All Share has historically given a slightly better return than HSBC FTSE 100. and has an TLR expense of 0.27 which is probably as cheap as you can get. Go with Cavendish Online and you won't pay platform fees either. You can set up a monthly savings plan and drip feed it in which is a really good idea as it smooths out any ups and downs in the index over the investment period. You can put it into an ISA as well.

    However, I decided against these two funds in favour of HSBC FTSE 250 as I quite like the idea of up and coming companies rising through the ranks, and the returns have historically been better.
    Also, it allows me to invest in Invesco Perpetual High Income Acc for its defensive properties, and if I feel brave enough Schroder Recovery Fund Z Accumulation both of which have high FTSE 100 exposure.


    Good luck with whatever you pick.



    Not an IFA, Not licenced to give advice, so PLEASE ignore anything I write.
    Edible geranium
  • badger09
    badger09 Posts: 11,864 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    MrCalm wrote: »
    Hello,

    I have recently graduated from University and would like to invest in an index tracker fund. I would like some advice from people with experience of tracker funds as to the best one to invest in?

    Thanks for your time :)

    Forgive me if I'm wrong, but you appear to be a novice investor :o

    Before investing £5k in anything, do you have any other savings, debts, secure income, pension plans etc etc?

    Do you have plans for the £5k - if so, what is the timescale?

    Have a read around the forum - there is lots of helpful general advice. Also have a look at sites like this one
    http://monevator.com/category/investing/

    and maybe invest in a couple of books - such as Smarter Investing by Tim Hale, and Monkey With a Pin (which I understand can be downloaded free?)

    Not trying to dissuade you from investing, but you need to some research before jumping in ;)
  • MrCalm
    MrCalm Posts: 5 Forumite
    Wow guys,

    Some great answers so far.

    @dun-Sorry I meant the AllShare. What would you suggest for a novice investor?

    @bug-If I want to at any stage can I just back out and sell my stock from HSBC?

    @badger-yes, I have some more savings and will soon have secure employment. I have no pension plans and yes I am a novice investor. Thanks appreciate your help :-)
  • bugbyte_2
    bugbyte_2 Posts: 415 Forumite
    Part of the Furniture 100 Posts Name Dropper Photogenic
    @bug-If I want to at any stage can I just back out and sell my stock from HSBC?

    You can buy and sell as you like, but most people will recommend you hold for 7 - 10 yrs at least, otherwise other forms of investment may be better. Read the books and do your research before doing anything though.

    I started out with three trackers, all HSBC - Pacific, American, FTSE 250 to give be a good geographical spread. You could go further and add Japan and Europe if you want coverage of most of the developed world, although this is not necessarily a good idea.
    Edible geranium
  • dunstonh
    dunstonh Posts: 121,460 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    @dun-Sorry I meant the AllShare. What would you suggest for a novice investor?

    Something more diverse that includes multi-assets. Not focusing in just one market.
    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.
  • xylophone
    xylophone Posts: 46,008 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Will your company provide a pension scheme?

    If you have already saved an emergency fund (are you using your cash isa allowance) you might consider drip feeding into a stocks and shares isa.

    The HL website is easy for a beginner to use and you can use their facilities to do some research. http://www.hl.co.uk/
This discussion has been closed.
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