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  • FIRST POST
    • movilogo
    • By movilogo 4th Dec 17, 11:35 AM
    • 2,288Posts
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    movilogo
    Help needed on ISA stock/share
    • #1
    • 4th Dec 17, 11:35 AM
    Help needed on ISA stock/share 4th Dec 17 at 11:35 AM
    I have never invested in Stock/share ISA before but now want to invest.

    I have already invested £10k in this year's cash ISA. So I believe I have further £10k allowance which I can invest in stock ISA (with another provider). Is that correct?

    I want to invest in Open Ended Investment Companies. I understand I have to do it via brokers like HL, III etc. But after that I have no clue

    What are the steps for this? How do I select a fund?
    Happiness is buying an item and then not checking its price after a month to discover it was reduced further.
Page 1
    • badger09
    • By badger09 4th Dec 17, 11:57 AM
    • 5,575 Posts
    • 4,879 Thanks
    badger09
    • #2
    • 4th Dec 17, 11:57 AM
    • #2
    • 4th Dec 17, 11:57 AM
    I have never invested in Stock/share ISA before but now want to invest.

    I have already invested £10k in this year's cash ISA. So I believe I have further £10k allowance which I can invest in stock ISA (with another provider). Is that correct?

    I want to invest in Open Ended Investment Companies. I understand I have to do it via brokers like HL, III etc. But after that I have no clue

    What are the steps for this? How do I select a fund?
    Originally posted by movilogo
    Yes, you can invest up to £10k in a S&S ISA.

    You could do worse than start here. Lots of useful info. Writer is biased towards passive investing, but IMHO that's no bad thing for a novice.

    http://monevator.com/investing-for-beginners-why-do-we-invest/
    I'm a supporter of dunstonh
    • movilogo
    • By movilogo 4th Dec 17, 12:16 PM
    • 2,288 Posts
    • 1,550 Thanks
    movilogo
    • #3
    • 4th Dec 17, 12:16 PM
    • #3
    • 4th Dec 17, 12:16 PM
    Once I select a fund, what would be total yearly charge?

    Is it sum of platform charge, typically 0.45% for HL
    +
    OCF/TER typically 1.30-1.6%

    Is there any other charges that I may incur?
    Happiness is buying an item and then not checking its price after a month to discover it was reduced further.
    • AlanP
    • By AlanP 4th Dec 17, 12:24 PM
    • 989 Posts
    • 703 Thanks
    AlanP
    • #4
    • 4th Dec 17, 12:24 PM
    • #4
    • 4th Dec 17, 12:24 PM
    Some providers work on a percentage basis, such as HL at 0.45%, some work on a dealing fee so you pay for each Buy/Sell transaction.

    Typically at <£25/30K a percentage basis is likely to work out best, there are various comparison tables / calculators on the the web - including one one on the monevator site to help you assess your options.

    HL at 0.45% is at the top of the percentage platforms, most are around 0.25%. Some may charge an annual fixed-fee ISA Admin fee.

    Assuming you go for OEICs on a percentage platform the only other cost would be the OCF/TER of the fund / funds you choose. These are paid implicitly by adjustments to unit prices as opposed to platform charges which are explicit and have to be funded either by cash or the platform automatically selling the required value of funds.
    • BLB53
    • By BLB53 4th Dec 17, 12:29 PM
    • 1,169 Posts
    • 960 Thanks
    BLB53
    • #5
    • 4th Dec 17, 12:29 PM
    • #5
    • 4th Dec 17, 12:29 PM
    Vanguard direct charge just 0.15% platform fee and if you select Their Lifestrategy fund which is v popular, a further 0.22% so just 0.37% total which works out at £3.70 for every £1,000 invested.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • movilogo
    • By movilogo 4th Dec 17, 12:31 PM
    • 2,288 Posts
    • 1,550 Thanks
    movilogo
    • #6
    • 4th Dec 17, 12:31 PM
    • #6
    • 4th Dec 17, 12:31 PM
    Taking an example,

    If I choose HL Ready Made ISA for regular balanced income,

    http://www.hl.co.uk/investment-services/isa/ready-made-isa/portfolio-plus

    It says net yield 3.2% (not guaranteed)
    Platform charge 0.45%
    OCF/TER 1.33%

    So, if I invest £1000 then does it mean under ideal scenario, I would receive

    £1000*(3.2 - 0.45 - 1.33)/100 = 14.6 at end of year?
    Happiness is buying an item and then not checking its price after a month to discover it was reduced further.
    • badger09
    • By badger09 4th Dec 17, 2:52 PM
    • 5,575 Posts
    • 4,879 Thanks
    badger09
    • #7
    • 4th Dec 17, 2:52 PM
    • #7
    • 4th Dec 17, 2:52 PM
    Taking an example,

    If I choose HL Ready Made ISA for regular balanced income,

    http://www.hl.co.uk/investment-services/isa/ready-made-isa/portfolio-plus

    It says net yield 3.2% (not guaranteed)
    Platform charge 0.45%
    OCF/TER 1.33%

    So, if I invest £1000 then does it mean under ideal scenario, I would receive

    £1000*(3.2 - 0.45 - 1.33)/100 = 14.6 at end of year?
    Originally posted by movilogo
    No. A fund's yield is stated after fund charges (OCF/TER).

    However, what you are looking at is an expensive method. There are far cheaper options for achieving a balanced portfolio. Some of which are outlined on Monevator.
    I'm a supporter of dunstonh
    • movilogo
    • By movilogo 4th Dec 17, 4:10 PM
    • 2,288 Posts
    • 1,550 Thanks
    movilogo
    • #8
    • 4th Dec 17, 4:10 PM
    • #8
    • 4th Dec 17, 4:10 PM
    I am trying to use the tool on this page.
    http://monevator.com/compare-the-brokers/

    How do I input data?
    ISA = ticked
    £ = 10000

    Investment details
    Funds = 10000
    Fund/trades/year = 2 [what is this?]
    Shares = 0 [should it it be 0 for ISA S&S?]
    Share trades/year = 0
    Years to hold a/c for = 5 [just a random number]

    Then it lists some brokers with annual cost and total cost.

    Should I select one with lowest annual cost?
    Happiness is buying an item and then not checking its price after a month to discover it was reduced further.
    • IanSt
    • By IanSt 5th Dec 17, 10:41 AM
    • 149 Posts
    • 104 Thanks
    IanSt
    • #9
    • 5th Dec 17, 10:41 AM
    • #9
    • 5th Dec 17, 10:41 AM
    Fund/trades/year = 2 [what is this?]
    Shares = 0 [should it it be 0 for ISA S&S?]
    Years to hold a/c for = 5 [just a random number]
    Originally posted by movilogo
    I've not used this comparison tool recently but from a quick look:

    Fund Trades/year - how many purchases/sells are you likely to do per year
    Shares - yes put 0 if you are only holding funds
    Years to hold - I think this could be important as some brokers will charge you for transfering/closing an account and so will bump up the average costs that the tool is calculating if you under estimate the number of years you would stay

    Should I select one with lowest annual cost?
    Originally posted by movilogo
    Well price is important but if this were a car would you just choose the cheapest car or would you choose the car which best suited your needs and your budget?

    For instance do all the brokers actually have the fund(s) that you are thinking of buying and have you looked for any reviews of the brokers and their platforms?
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