Cheapest FTSE All share Tracker

jobits

Ive had a virgin tracker for some years and am aware that the charges are very high 1%.I would therefore like to keep the ISA wrapper but transfer to another tracker - I am looking for one with very low charges - what is the cheapest tracker at the moment?

SnowMan

jobits wrote: »

Ive had a virgin tracker for some years and am aware that the charges are very high 1%.I would therefore like to keep the ISA wrapper but transfer to another tracker - I am looking for one with very low charges - what is the cheapest tracker at the moment?

Haven't looked recently but amongst the lowest charging FTSE all share trackers, (I've got money in each), used to be Fidelity (0.1% amc and 0.3% TER), HSBC (but important has to be purchased through Hargreaves Lansdown to buy into the institutional units with the 0.25% amc), M and G (0.3% amc, 0.49% TER), and L and G (0.5% amc and 0.52%? TER).

The annual management charge is important but look at the total expense ratio (TER) also as that reflects all annual charges.

And some have minimum investment limits.

My info may be slightly out of date but worth checking these ones out while doing your research.

jobits

Thanx for your help Snowman - much appreciated!

Blah99

How about an ETF?

SnowMan

Blah99 wrote: »

How about an ETF?

When I last looked into ETFs (Exchange Traded Funds) the total expense ratio worked out at around 0.4%. Given that these are effectively shares that replicate the performance of an index, you then have to use something like a self select ISA tax wrapper to include the ETF within. There are strockbroker costs involved with "purchasing" this wrapper.

Consequently it seemed to me that they could not compete with say the traditional Fidelity FTSE all share OEIC/unit trust method with its 0.3% TER. But I don't claim to know a lot about them. Can you provide more info? I would be quite interested to know.

Blah99

SnowMan wrote: »

When I last looked into ETFs (Exchange Traded Funds) the total expense ratio worked out at around 0.4%. Given that these are effectively shares that replicate the performance of an index, you then have to use something like a self select ISA tax wrapper to include the ETF within. There are strockbroker costs involved with "purchasing" this wrapper.

Consequently it seemed to me that they could not compete with say the traditional Fidelity FTSE all share OEIC/unit trust method with its 0.3% TER. But I don't claim to know a lot about them. Can you provide more info? I would be quite interested to know.

The only index tracking ETF I've used is the Lyxor one (epic L100) which has a TER of 0.3%. After your post I had a look at some others and you're right, some are up to 0.5% (eg: epic ISF). But my understanding is the Fidelity product has the lowest TER on the market, and for OEICs you're far more likely to see TERs around and over 1% (link below, average TER for OEIC 1.01%). The high TERs on ETFs are mainly for index trackers, other ETFs many are around 0.2%.

http://www.telegraph.co.uk/finance/personalfinance/2817165/How-investment-vehicles-compare.html

When you say "stockbroker costs" involved in an ISA wrapper, I'm not sure what you mean. For example the III ISA wrapper has no fees, no inactivity charge and if you use their builder (which, admittedly, won't suit everyone) you'll pay only £1.50 a trade, or its £12 for a normal trade.

Is that useful?

SnowMan

Thanks. It is useful to have it confirmed there isn't any obvious cost saving to be had through (index tracking) ETFs relative to the (say) Fidelity Moneybuilder Index OEIC fund. Although the comparison is closer than I thought as the "wrapper" if done as you suggest comes pretty much free (ignoring the relative low dealing charges).

I'm a believer in passive investing (haven't got the time, energy or belief to be able to stock pick but that's just me) so that is the obvious comparison for me personally.

I have never gone near the active OEICs and unit trusts. These are really there for commission based IFAs where the higher charges of these funds pay their commission. Of course IFAs will say they can predict which active funds will outperform etc etc and provide all sorts of nonsense arguments to criticise trackers but the reality (in my opinion at least) is that they are only selling these because they pay the IFA commission.

tradetime

I suspect ETF's are for the more active, the type of funds being mentioned here (Fidelity Moneybuilder Index OEIC fund) seem like good value. I tend to champion ETF's, more based on the US model where fees can be higher for funds, and the selection of ETF's available dwarfs what is available on the LSE. I find the ability to mix and match many "slices" of the market universe using perhaps a dozen or so funds to be very useful.
I also like to be in control, or think I am

max11

SnowMan wrote: »

Haven't looked recently but amongst the lowest charging FTSE all share trackers, (I've got money in each), used to be Fidelity (0.1% amc and 0.3% TER), HSBC (but important has to be purchased through Hargreaves Lansdown to buy into the institutional units with the 0.25% amc), M and G (0.3% amc, 0.49% TER), and L and G (0.5% amc and 0.52%? TER).

The annual management charge is important but look at the total expense ratio (TER) also as that reflects all annual charges.

Help! the more I read the more I got confused!
It is my first investment, I want to invest my £3,600 in s&sISA (index-tracker).
I was going to buy some unit trust in L&G index tracking ISA, but then I noticed the low performance of L&G compared to the FTSE index
then I checked for Fidelity for example, the figures are better and fees are cheaper.
I know that previous performances are no garantee for future ones, but what do you recommed me to do? I'm very confused:mad:
thanks,

tradetime

If it is simply a passive Index tracker then I would have thought there should be little difference between the two since they are merely tracking the index, thus the fund to go for to my way of thinking would be the one with the lowest fees.

dunstonh

I was going to buy some unit trust in L&G index tracking ISA, but then I noticed the low performance of L&G compared to the FTSE index

Thats not to do with the provider but the fact you are looking at index trackers.