Cheapest way to buy funds discussion

highet

i have used HL vantage service for myself,my wife and 2 kids - have always found them very helpful - online valuation service is excellent - and as a bonus have built up almost £300 of rebated commission over last 3 years - i certainly cant fault them ( as someone who used to invest direct with unit trust companies and pay commission to them for nothing)

Tia91

I am thinking of investing in an ISA and have been looking at discount brokers that give back a % of annual commission. I don't know how much Hargaves Lansdown gives back, but I've found Chartwell giving back 50% of it, and Clubfinance giving back 75% of it. How does HL compare with these?

elizw

after reading all your replies there is not much info on Chartwell - I wondered if anyone had any thoughts on them - I am looking to invest about £2400 in unit trusts

ginav_2

Im a newbie and was looking for the best discount brokers around at the moment. Has anybody got any suggestions for the cheapest discount broker at the moment?

dunstonh

ginav wrote:

Im a newbie and was looking for the best discount brokers around at the moment. Has anybody got any suggestions for the cheapest discount broker at the moment?

Depends on what tax wrapper you wish to buy the funds in. There is no one best provider for all tax wrappers.

stphnstevey

HELP!!!!!!!!!!!!

I think I understand the concept, but the further along this post I read, the more confused I get. There seems to be alot of people who really understand how these Brokers work and have used them successfully. In true MoneySavingExpert tradition, can somebody simplify this for us laymens to understand!!!!:T :beer:

Say I wanted to buy an Stocks and Shares ISA through one of these brokers (as I imagine the majority of people might want to do):

- Can you buy an S&S ISA through a broker?

- Is the concept of using a Broker so that the Annual Management and Initial Charges
a) Cheaper?
b) Refunded?

- If the charges are very low already (for instance a Index Tracker) are you likely to gain any benifit from using a broker?

- Are there additional costs using a broker compared to going to the company direct?

- Do Brokers offer any advice at all?

- Are the Brokers as reputable as the Financial Institutions that offer the S&S products?

THANKS!!!!!!!;)

Crocodile_2

Dear MoneySaving Experts,

This is my first post to this website, I have invested some savings in a bonds fund over the last several months, at the time understanding this to be the safest choice for a low but fairly reliable return on investment.
But the fund went down by over 4% in 1 year! Is there any part of an investment research website where I can check in the most general terms which kind of market looks good to invest in now, or if e.g. a high interest savings account?

Is now a bad time in general for the bonds market?

Yours burnt but undeterred,

Will

dunstonh

Is now a bad time in general for the bonds market?

Some areas have been weaker than others and a small drop has occured with some.

How are you purchasing the funds? Are you paying a 5% initial charge? Many fixed interest funds saw around 1% growth over the year so a 5% initial charge could account for the difference.

If you bought through advice, then 5% is to be expected. If you are paying around 5% without advice then the simple question would be why?

Crocodile_2

Dear Dunstonh,

Thanks so much for the helpful and quick reply. The fund itself went down -4.3% in the period from 1 July 2005 to 3 July 2006, and invested in the global bonds market. I invested of my own choice without advice. There is no entry or exit fee for this fund. (the fund was M&G International Sovereign Bond Fund)

The letter explaining the drop mentioned US interest rates constantly rising as reason for US bond prices falling, same happening in Europe too as interest rates rise. If this is a genuine explanation, then I suppose it must be bad to invest in bonds until global interest rates stop rising?

But basically, I'd prefer to ask if there is some part of the MSE (or other) website I could check reguarly, which suggests which kind of investment would be most likely to do well at any given time? (e.g. that says, "now interest rates are rising and look to keep rising in Europe and US, so not a great time to invest in European or US bonds, better to invest in blue chip share funds" or something like this.)

I figure to invest in fairly safe funds first, then one day if I understand more, maybe graduate to shares.

Many thanks again.

dunstonh

then I suppose it must be bad to invest in bonds until global interest rates stop rising?

No. Its not as simple as that. As part of a diverse portfolio, they can very useful to offset the higher risk funds and aid rebalancing. The global bond funds I have used over the last 5 years havent seen a drop yet but I have tended to look towards European focused funds.

The fund you have chosen has not been a good performer since launch. Whilst past performance is no guide to future returns, a fund that has been a bottom half performer since launch wouldnt normally be one you would look for unless there is a specific reason.

But basically, I'd prefer to ask if there is some part of the MSE (or other) website I could check reguarly, which suggests which kind of investment would be most likely to do well at any given time?

That is the job of discretionary managers and investment specialist IFAs. Fund recommendations come under FSA rules for providing advice. Therefore the MSE rules do not allow fund recommendations. You could try motley fool as you have lots of people suggesting all sorts of things there. Although be warned that most work on past performance which is never the right way to invest.

Advisers do not get it right all the time as well. We have success stories and failures. However you minimise the chances of that by diversifying your portfolio and investing in a range of funds across the sectors with a percentage allocation to each that averages out to match your risk profile. Then rebalance the portfolio periodically.

Your current approach of single fund investing and trying to catch the next best thing will not work.