Help with funds

Daz1

Hi all

I have been dabbling in individual equities with varying success but now am looking to invest in a fund that I can sit back and not check up on every day. One thing that confuses me though.....most funds require a "minimum investment" of £xxx, which is easy enough to understand, and also an "additional" of £yyy, which I take to mean if you want to add more money to your fund, the minimum you can do at a time is £yyy and this is done as and when you choose. Am I correct so far?

The final point is some funds have a "savings" section of £aaa. Does this mean you have to set up a regular contribution in the amount of £aaa monthly?

Finally, if I buy through a fund supermarket eg Halifax Sharedealing, how will this fund appear on my portfolio page, will it be like any individual share with latest price, book value etc? If I opt for one of the high income funds, paid monthly, is it paid via my bank account or in the form of a "monthly dividend"

Any advice appreciated

masonic

Daz1 wrote: »

Hi all

I have been dabbling in individual equities with varying success but now am looking to invest in a fund that I can sit back and not check up on every day. One thing that confuses me though.....most funds require a "minimum investment" of £xxx, which is easy enough to understand, and also an "additional" of £yyy, which I take to mean if you want to add more money to your fund, the minimum you can do at a time is £yyy and this is done as and when you choose. Am I correct so far?

The final point is some funds have a "savings" section of £aaa. Does this mean you have to set up a regular contribution in the amount of £aaa monthly?

Yes, you've got the right idea here. It's probably worth pointing out that the 'minimum investment' is not set in stone. Often fund supermarkets pool their investments, so subdividing into smaller holdings is possible.

Finally, if I buy through a fund supermarket eg Halifax Sharedealing, how will this fund appear on my portfolio page, will it be like any individual share with latest price, book value etc? If I opt for one of the high income funds, paid monthly, is it paid via my bank account or in the form of a "monthly dividend"

This will probably vary and I don't have any personal experience of the Halifax platform. You'll normally get a table of your funds with prices, values etc. As for the income, there is usually an option to have the income automatically reinvested into the fund, which usually makes sense unless you need the income. If you do want the income paid out, then it pays to check the T&Cs/FAQ so that you know exactly where you stand. Income may be paid into a separate account at the fund supermarket and you need to make arrangements for it to be paid out to your bank periodically.

Daz1

Thanks for the info, masonic. Ideally I would like to avoid one that commits me to a monthly contribution as I would prefer to choose when I want to buy more. Also, the Halifax platform will charge me £11.95 to purchase in real time. Do you know if the monthly contributions (or in fact any additions as lump sums) would be subject to the same or any charges?

masonic

Daz1 wrote: »

Thanks for the info, masonic. Ideally I would like to avoid one that commits me to a monthly contribution as I would prefer to choose when I want to buy more. Also, the Halifax platform will charge me £11.95 to purchase in real time. Do you know if the monthly contributions (or in fact any additions as lump sums) would be subject to the same or any charges?

You wouldn't normally need to commit to regular savings - it's usually offered as an alternative to lump sum. I've just had a quick look and the charges relate to shares and not to funds, which carry no dealing charges. If you are interested in holding both shares and funds, that £11.95 charge looks quite high.

Edit: I've also taken a look at a few of the funds on offer at Halifax and it seems they aren't discounting as heavily as others on initial and ongoing management charges. One cheaper alternative that's pretty popular here and which I use is Hargreaves Lansdown. It might be worth comparing the two for fund charges if you have an idea of which funds you want to hold.

Paddy_Boy

Also, the Halifax platform will charge me £11.95 to purchase in real time

Hi Daz, I am about to dabble in funds myself and while I dont know the Halifax platform( I stayed away as I just assume any Bank would not be the most cost effective) I think that charge should not be for regular savings into funds or lump sum investments, if that is the case then my advice is RUN!!!!!!!!!!! That sounds like a typical bank share dealing charge.

There are several platforms mentioned on these pages, I(like many) plumped for Hargreves Lansdown, am sorting ouy my regular savings as we speak. You just have to be carefull not to pay too much attention to their marketing.

now am looking to invest in a fund that I can sit back and not check up on every day.

What type of fund were you thinking?

Daz1

masonic, sir, you are a legend. Some of the funds on offer are heavily discounted but like you say i night find a bigger selection elsewhere at cheaper rates. Once again thank you

Daz1

Paddy_Boy wrote: »

Hi Daz, I am about to dabble in funds myself and while I dont know the Halifax platform( I stayed away as I just assume any Bank would not be the most cost effective) I think that charge should not be for regular savings into funds or lump sum investments, if that is the case then my advice is RUN!!!!!!!!!!! That sounds like a typical bank share dealing charge.

There are several platforms mentioned on these pages, I(like many) plumped for Hargreves Lansdown, am sorting ouy my regular savings as we speak. You just have to be carefull not to pay too much attention to their marketing.



What type of fund were you thinking?

Hi mate. Thanks for the advice. I havent really looked in earnest because i was confused by the terminology and conditions. Now that i have some clarification i can start the hunt.

Daz1

before i saw the update from masonic i looked at some funds and thought about simply mimicking their top 10 holdings in equity. It avoids the management charge etc but incurs dealing costs instead. Has anyone any experience of this "strategy"

masonic

Daz1 wrote: »

before i saw the update from masonic i looked at some funds and thought about simply mimicking their top 10 holdings in equity. It avoids the management charge etc but incurs dealing costs instead. Has anyone any experience of this "strategy"

Personally, I don't think that would work so well. You can typically buy funds with the initial charge 100% discounted, so there's only a 1-2% annual management charge to worry about. You'd need to invest a lot of money for the dealing charges on 10 shares (and ongoing charges to adjust them) to work out cheaper.

Paddy_Boy

[/Qbefore i saw the update from masonic i looked at some funds and thought about simply mimicking their top 10 holdings in equity.UOTE]

What if they sell one of those holdings and you are not aware of the storm cloud brewing and you don't sell?????

Daz1

masonic wrote: »

Personally, I don't think that would work so well. You can typically buy funds with the initial charge 100% discounted, so there's only a 1-2% annual management charge to worry about. You'd need to invest a lot of money for the dealing charges on 10 shares (and ongoing charges to adjust them) to work out cheaper.

I guess youre right and some of the managed funds shift their percentages holdings quite frequently meaning i would be paying each time i adjusted my ratios.