Virgin Shares ISA (FTSE Tracker) - right time to start one?

ClarkeyBoy1987

Hi,

I get the feeling, now, that we are quite possibly past the worst of the recession and that things could start getting better very soon. I dont want to miss out on a potentially large amount of money that could be made out of this - if invested wisely and at the right time.

Does anyone else feel the same way? Obviously if we are coming out of the recession then now is a good time to invest - since things are gonna get a lot better over the next few months. I am 22 and by no means an investment expert.

I have just signed up for a Virgin ISA, starting very cautiously with £100, making sure I have enough in my other accounts to get me settled in the working world after I graduate. I have had it since Monday and I have just had a look at my account - I have lost £1.20, this week, overall. It was over £2 lost until tonight when it went up by 87p (not much - but its more than my other accounts would give me in an entire year for £100!!).

What are peoples opinions of Virgin? Are they a good company for FTSE trackers? They seem to have a very low fee (1%) - dont know if this is based on how much you put in, take out or gain but either way it sounds good.

Are there any much better companies out there when it comes to investing?

Thanks in advance.

Regards,

Richard

Kalahary

I'll be the first to say I'm not an expert on this, but I've been looking at index tracks and managed funds recently.

The managed funds usually have an annual charge of about 1-1.75%, but most index trackers I've seen are less than 0.5% per year because they require less work for the manager. They also seem to have no initial investment charge where managed funds can go up to 5%.

www[dot]fool[dot]co[dot]uk/Your-Money/guides/Index-Trackers-Vs-Managed-Funds.aspx

Going off topic... At what point am I allowed to post links properly?

opinions4u

First of all, nobody really knows when the right time is. A look at this chart suggests early 2009 was the right time - so perhaps you're already 18 months behind the curve.

What are peoples opinions of Virgin? Are they a good company for FTSE trackers?

As it's a tracker, they are not going to be significantly different to any other company offering the same tracker funds. It's going to track whichever index the money is in. End of story.

They seem to have a very low fee (1%)

Because there is no investment management involved, trackers should have a low fee. Legal & General offer a FTSE100 stocks and shares ISA tracker with a 0.65% charge and a £50 cashback if you buy via www.topcashback.co.uk. They also have a range of other indeces that you could track, some with lower charges. I'm fairly sure you could find some providers down at the 0.25% mark - trawl around sites like Fidelity and you will probably find something useful (EDIT: Found an HSBC tracker at 0.25% via Fideltiy).

Whichever route you take, good luck! But I think Mr Branson will be overcharging you.

it went up by 87p (not much - but its more than my other accounts would give me in an entire year for £100!!).

You should be able to get 2.5%+ on an easy access account. Try www.egg.com, www.theaa.com/savings, www.tesco.com/finance for starters.

Rollinghome

Are there any much better companies out there when it comes to investing?

Yes, most of them are.

The performance of tracker funds, if they're doing their job, should be very similar. The only real difference is the annual charges.

The 1% charge for the Virgin trackers is 4 times higher than the HSBC trackers and several others. The reason trackers out-perform the majority of managed funds is their low charges, largely due because most pay little or no commission to advisers. So a high charging tracker is no use to anyone.

On timing, many investors are now worrying about a double-dip recession. If they're right then it's a bad time to invest. If they're wrong, then it could be a good time.

ClarkeyBoy1987

"The 1% charge for the Virgin trackers is 4 times higher than the HSBC trackers and several others."

I did actually look at the HSBC one - but decided against it on the basis that ALL my money is in HSBC accounts. Having all my money tied up in one bank is a bad bad idea - I mean if they went bankrupt there is no guarantee that I'll get all my money back. I wanted to try someone different.

I also tend not to go for names I have never heard of - Virgin, however, I had. Are all tracker funds ISAs? I know the Virgin t's and c's said that I am not allowed to sign up to any other ISA in the first year (I think that was the time limit).

atypical

ClarkeyBoy1987 wrote: »

I did actually look at the HSBC one - but decided against it on the basis that ALL my money is in HSBC accounts. Having all my money tied up in one bank is a bad bad idea - I mean if they went bankrupt there is no guarantee that I'll get all my money back. I wanted to try someone different.

Why is all of your money with HSBC? All of HSBC's savings products are poor. You can easily beat them, see the post by opinions4u above. Even ignoring that, the first £50,000 of your savings are covered by the FSCS scheme. That's all before even considering the likelyhood of HSBC collapsing.

If you bought the tracker via Fidelity you would have seperate protection with them also under the FSCS. If they collapsed your first £50,000 would be protected.

ClarkeyBoy1987 wrote: »

I also tend not to go for names I have never heard of - Virgin, however, I had. Are all tracker funds ISAs? I know the Virgin t's and c's said that I am not allowed to sign up to any other ISA in the first year (I think that was the time limit).

All tracker funds are not ISAs. You should think of an ISA as a box into which you can put certain products; when they're in the box they're free from tax. Your box is only so big, for this year it's £10,200 of which £5,100 can be cash. Once you subscribe (pay money into an ISA) you cannot subscribe to another until the next tax year.

As for not hearing of names, you said yourself in your first post that you're "by no means an investment expert". You wouldn't expect yourself to have come across the names in the area.

The links to the HSBC trackers: FTSE 100, FTSE 250, FTSE All Share

xrjtg

Hypothetically, if we're coming out of recession and everybody knows that we're coming out of recession, then that's priced in already by the market. Prices won't rapidly increase if thing's go as expected.

dunstonh

I have just signed up for a Virgin ISA, starting very cautiously with £100, making sure I have enough in my other accounts to get me settled in the working world after I graduate. I have had it since Monday and I have just had a look at my account - I have lost £1.20, this week, overall. It was over £2 lost until tonight when it went up by 87p (not much - but its more than my other accounts would give me in an entire year for £100!!).

What are peoples opinions of Virgin? Are they a good company for FTSE trackers? They seem to have a very low fee (1%)

Virgin financial products are typically very poor. Usually as they are expensive and low quality.

The Virgin tracker fund is one of the worst you can buy.

I did actually look at the HSBC one - but decided against it on the basis that ALL my money is in HSBC accounts. Having all my money tied up in one bank is a bad bad idea - I mean if they went bankrupt there is no guarantee that I'll get all my money back. I wanted to try someone different.

You have £50k investment FSCS protection on top of the deposit protection. Plus, they are unit linked investments. You are not putting money into HSBC. You are putting the money into unit linked funds.

I also tend not to go for names I have never heard of - Virgin, however, I had. Are all tracker funds ISAs? I know the Virgin t's and c's said that I am not allowed to sign up to any other ISA in the first year (I think that was the time limit).

You sound exactly like the sort of customer Virgin look for. You have no knowledge of investing so you have no knowledge of the investment brand names. So, you bought from a consumer brand you knew. Being a consumer brand it wont be cheap or the best. You bought the brand.

The ISA is a container. Its not an investment. It is a container you put investments of your choice into. So, in your case, you chose Virgin as the ISA manager and Virgin as the fund house. Typically nowadays, you choose a fund supermarket as ISA manager and then choose across the market for your funds.

The main Unit Trust trackers are Vanguard, Blackrock (these are the best two) followed by HSBC and L&G.

ClarkeyBoy1987

Thanks for the advice. I guess I will have to wait till April 6th before subscribing to another ISA.

My job, when I get one, should have an £18-20k starting salary but my living expenses should still cover a fair amount of that. My parents have advised me to work out my living expenses, multiply that by 1.25 - 1.5, then work out how much I have left to invest - I think this would be wise as the extra 25-50% on my expenses should cover anything I hadn't predicted - like if I owe more for electricity etc than I thought.

"Your box is only so big, for this year it's £10,200 of which £5,100 can be cash."
However much I have left shouldn't add up to more than £10,200 even if I am on £30k at some point so I don't need to worry about the limit.

Regards,

Richard

PS I know this is off topic but has anyone else realised that the formatting buttons don't work in Google Chrome, or is that simply because I haven't been on here for long enough?
PPS I will post back here should I have any more questions.

jem16

ClarkeyBoy1987 wrote: »

Thanks for the advice. I guess I will have to wait till April 6th before subscribing to another ISA.

You can of course transfer to another ISA now - you don't have to wait until April 6th.

ClarkeyBoy1987

jem16 wrote: »

You can of course transfer to another ISA now - you don't have to wait until April 6th.

I think it says in the Virgin t's and c's that I am not allowed to subscribe to another ISA for a year. I will send Virgin a message to clarify this, or read up on the t's and c's myself.