Investing in FTSE 100

didnof

hi all, this is my first post on here so i hope someone can help as i'm a little bit confused! now that the FTSE 100 shares are at a low and for noce i have some savings at my disposal , i'd like to invest in the FTSE 100 since the 'time feels right'. what i'm struggling with are all the options that are on offer, what i basically want is to invest in shares that track the performance of teh FTSE 100.

i've registered with the website td waterhouse, and i opened a trading ISA account (is this the correct first step), and when looking at the FTSE 1000 options they have all sorts on offer, just to name a few:

F&C FTSE All-Share Tracker 1 Acc UK Large-Cap Blend Equity 11.31 0.39 300.20 Pence

F&C FTSE All-Share Tracker 1 Inc UK Large-Cap Blend Equity 11.23 0.40 248.50 Pence

HSBC FTSE 100 Index Retail Acc UK Large-Cap Blend Equity 8.20 1.14 107.30 Pence

HSBC FTSE 100 Index Retail Inc UK Large-Cap Blend Equity 8.14 1.14 76.98 Pence

HSRBS FTSE 100 Tracker Acc UK Large-Cap Blend Equity 7.97 1.00 172.00 Pence


first of all am i looking in the right place, and then are these the right areas to be looking in.... please help! i need it!

tradetime

didnof wrote: »

hi all, this is my first post on here so i hope someone can help as i'm a little bit confused! now that the FTSE 100 shares are at a low and for noce i have some savings at my disposal , i'd like to invest in the FTSE 100 since the 'time feels right'. what i'm struggling with are all the options that are on offer, what i basically want is to invest in shares that track the performance of teh FTSE 100.

i've registered with the website td waterhouse, and i opened a trading ISA account (is this the correct first step), and when looking at the FTSE 1000 options they have all sorts on offer, just to name a few:

F&C FTSE All-Share Tracker 1 Acc UK Large-Cap Blend Equity 11.31 0.39 300.20 Pence

F&C FTSE All-Share Tracker 1 Inc UK Large-Cap Blend Equity 11.23 0.40 248.50 Pence

HSBC FTSE 100 Index Retail Acc UK Large-Cap Blend Equity 8.20 1.14 107.30 Pence

HSBC FTSE 100 Index Retail Inc UK Large-Cap Blend Equity 8.14 1.14 76.98 Pence

HSRBS FTSE 100 Tracker Acc UK Large-Cap Blend Equity 7.97 1.00 172.00 Pence


first of all am i looking in the right place, and then are these the right areas to be looking in.... please help! i need it!

Well I will leave those to someone who understands them to explain the differences if any, they are not really the type of thing I am into, but for the purpose of the part of your post I have highlighted.
the iShares FTSE 100 ETF (ISF) does nothing flashy but track the FTSE 100
it trades like a normal company stock, does just what it says on the tin.

turbobob

The difference between the "Acc" (accumulation) and "Inc" (income) units is how they deal with dividends. The accumalation funds do not distribute income - instead they increase the unit price by an amount that represents the income being re-invested. Income funds pay out the income (but you can choose to automatically re-invest the income, in which case the number of units you held would increase).

The F&C fund is an FTSE All Share tracker - this is not the FTSE 100, the all share is broader and includes FTSE100, 250 and small cap indices.

If you decided to go with the iShares ETF you don't do it through the "funds supermarket" part of TD Waterhouse. You have to go through the procedure as if you are buying a share, and the ticker code would be "ISF". Its a bit "clunky" but I've managed to buy ETF's on TD Waterhouses system...

Biggles

didnof wrote: »

hi all, this is my first post on here so i hope someone can help as i'm a little bit confused! now that the FTSE 100 shares are at a low and for noce i have some savings at my disposal , i'd like to invest in the FTSE 100 since the 'time feels right'.

The FTSE100 was at a low in March but since then it has risen by over 30%. The time may still be right (or may not!), but you need to know more facts before you think of investing.

didnof

cheers for the relpies, its funny you mention ETF's as while i was talking to various companies, they were all reuctant to offer any advice whatsoever, but one of them couldnt help but point me towards ETF's, so i've had a look into them and they do seem to match what i'm after.

you're right about the FTSE in march, whoever invested then would be quids in right now, but we're still at the level we were arund 5 years or so ago, will be interesting to see how quickly or not they get back to what they were.

dunstonh

while i was talking to various companies, they were all reuctant to offer any advice whatsoever

Advice comes with a liability. Its possible that the companies you talked to had no authorisations to give advice or didnt want to without complying with the FSA's "know your client" rules.

you're right about the FTSE in march, whoever invested then would be quids in right now, but we're still at the level we were arund 5 years or so ago, will be interesting to see how quickly or not they get back to what they were.

What is it about the FTSE100 that appeals to you? Do you think that the large caps are going to outperform the general market? Are you aware that the FTSE100 has been one of the worst performing Western indicies for over a decade? Are you aware that FTSE100 trackers have spent most of the last 15 years near the bottom of the performance tables?

Obviously past performance means nothing and its future potential thats important. However, it helps to know what about what you are potentially investing in.

Rollinghome

dunstonh wrote: »

Are you aware that FTSE100 trackers have spent most of the last 15 years near the bottom of the performance tables?

Which tables are these exactly? And why on earth would any competent (and honest) adviser refer to a 15 year period when most of the trackers now available weren't available then and those few that were, were charging almost as much for management as managed funds? The funds now available to investors often pay little or no commision to IFAs and so have very low costs. EFT trackers that pay no commission have even lower costs.

While it's true that FTSE 100 trackers haven't done as well as FTSE Allshare trackers, all those funds with charges below 0.5% pa consistently, and that's important, perform better than the average managed fund in the UK All Companies sector.

Yes, it could well be argued that the best advice for many would have been to have stayed out of shares and unit trusts altogether. After all, the FTSE 100 is down 30% and the FTSE All-share down 25% over the last 10 years. The poor old Nikkei has nearly halved and is far worse over a longer period. But think about the poor starving children of financial advisors if they had given that advice and lost all that commission!

So an All-share tracker might be a better option, it's the one I'd go for, but misleading claims (for whatever reason) do nothing but confuse.

gozomark

Rollinghome wrote: »

And why on earth would any competent (and honest) adviser refer to a 15 year period when most of the trackers now available weren't available then and those few that were, were charging almost as much for management as managed funds?

due to their very nature, its easy to guess what their performance would have been had they existed for the last 15 years.....

dunstonh

Which tables are these exactly?

Take your pick. Morningstar and Trustnet are good examples.

And why on earth would any competent (and honest) adviser refer to a 15 year period when most of the trackers now available weren't available then

The FTSE 100 has been around for over 20 years and there are trackers that have been available for 10-13 years that are still available.

those few that were, were charging almost as much for management as managed funds?

Even if you factor out the higher charges that some of the early ones made that wouldnt have changed the positions by very much.

While it's true that FTSE 100 trackers haven't done as well as FTSE Allshare trackers, all those funds with charges below 0.5% pa consistently, and that's important, perform better than the average managed fund in the UK All Companies sector.

No they dont. The FTSE all share does perform generally better but is more often than not around the mid table point as you would expect it to be. The FTSE100 has spent more time in the bottom half than the top. If large caps come back into favour then you would expect the FTSE100 to move on up. However, they spent most of the Labour years out of favour.

10 year cumulative performance stats from Financial Express

142 funds available over that whole period. Sector average is the mid point with a return of 8.50%

M&G index tracker: 71/142 8.41%
L&G UK Index 72/142 8.14%
HSBC All share 80/142 5.47%
Fidelity MB index 85/142 4.06
M&S UK 100 117/142 -6.76
RBOS 100 121/142 -7.06%
HSBC 100 122/142 -7.32%
SW uk tracker 127/142 -9.31%

Those that were above the sector average were

F&C All share 67/142 9.03%
SW all share 63/142 10.14%

Yes, it could well be argued that the best advice for many would have been to have stayed out of shares and unit trusts altogether.

I doubt that could be argued as no-one has a crystal ball and most diversified portfolios would still have made money over the long term.

But think about the poor starving children of financial advisors if they had given that advice and lost all that commission

Nothing to do with commission. No-one earns anything from what is typed here. Its about finding out why the OP has picked the FTSE100 and reasons behind it and if they realise how poor an index it has been. Are they investing on what they think may be better future potential or they an investing without any knowledge and just picking the FTSE100 as its one they have heard of?

So an All-share tracker might be a better option, it's the one I'd go for, but misleading claims (for whatever reason) do nothing but confuse.

An all share tracker would be better for a lazy investor but the claims are not misleading and backed up by fact. The tables are there for anyone to use if they are so inclined to do so.

didnof

dunstonh, about the advice from the companies, i'm not quite sure it registered with you what i was trying to say, cos the point about them not being able to give advice was my whole point - these companies are there to action the transactions and are not able to give advice even if they are in a position to.

i dont claim to be an expert in this area in the slightest, for once i'm in a position with a bit of savings at hand and since shares in general are so low right now i thought if any time was a good one then now was it. putting my money in the bank is the last thing i wanted to do, but at the same time i wanted a low risk investment that would offer a higher return than the bank, and from everything i'd heard the ftse 100 matched my criteria.

jem16

didnof wrote: »

i wanted a low risk investment that would offer a higher return than the bank, and from everything i'd heard the ftse 100 matched my criteria.

A ftse 100 tracker is not low risk.