Free transfer between funds

Gaffy

My investment strategy is a very basic one, and that is for the last few years I have a six figure lump sum in a Virgin ISA Bond & Gilts Fund, when the market has dropped sufficiently I transfer the whole amount to the Virgin ISA UK Index Tracker Fund, then when the market has recovered enough I transfer the whole amount back to the Virgin ISA Bond & Gilts Fund, and then I repeat the process again as and when the market dictates.

Now all I pay is a 1% annual fee which I know is more than most firms charge, however in Virgin's favour it is free of charge to transfer between the funds above.

My question is, do any other firms (Fidelity, BlackRock, etc) charge a smaller annual fee and most importantly allow free transfer between equivalent funds.

P.S. I fully expect dunstonh to say how bad the Virgin products are but as far as I can tell they are the only ones that don't charge to transfer between funds and thus it has served me well.

Lokolo

If you used a fund supermarket you would find minimal (0% mostly, sometimes 0.25%) to change. And you get a greater range to choose from.

datostar

I suspect that if you have an account directly with many fund managers as opposed to fund supermarkets or brokers you'll find that there is no charge for switching between funds. You are restricted to their own funds, of course, but if you're operating outside of an ISA there's nothing to stop you opening multiple accounts with different managers.

xrjtg

I'd be interested to hear how your strategy has performed compared to the two products you are using.

dunstonh

P.S. I fully expect dunstonh to say how bad the Virgin products are but as far as I can tell they are the only ones that don't charge to transfer between funds and thus it has served me well.

You are right on the first bit but most platforms dont charge on switches now. Going direct to fund house is old fashioned and they still often have old fashioned charging methods. The few platforms that are left that still charge 0.25% are in process of killing it. Even Fidelity abolished it on values over £50,000 and they are very slow to react to market changes.

That said, even if you had a 0.25% switching charge, the higher cost of virgin funds would allow you around 3 switches a year on the full amount and still be cheaper!

Gaffy

I see, thank you very much.

What would be the closest matching funds in say Fidelity, a normal Bond & Guild fund and UK Index Tracker?

Kalahary

Why limit yourself to only one fund manager like Fidelity? Most fund supermarkets like HL let you transfer between funds whenever you choose and usually get the initial fee reduced to zero, and you get a huge choice of funds. The funds preform no differently if bought directly from Fidelity or not.

Virgin's FTSE All Share tracker has a TER of 1%, and I believe the cheapest at the moment is HSBC's at 0.27%.

Although 0.73% might not seem like much when its £7.30 from a £1000 investment, but its surprising how much you save from a small difference over a couple of years.

jimjames

I also recommend HL Vantage.

Very easy to switch online and fund like HSBC FTSE 100/All Share only have charges of 0.27% pa, that makes a big difference long term compared to 1% pa.

jimjames

Kalahary wrote: »

and I believe the cheapest at the moment is HSBC's at 0.27%.

Although 0.73% might not seem like much when its £7.30 from a £1000 investment, but its surprising how much you save from a small difference over a couple of years.

I can't link yet but put this in your browser to show the effect of charges...

www. fool.co.uk/news/investing/2010/10/11/a-new-take-on-fund-charges.aspx

Linton

Kalahary wrote: »

Why limit yourself to only one fund manager like Fidelity? Most fund supermarkets like HL let you transfer between funds whenever you choose and usually get the initial fee reduced to zero, and you get a huge choice of funds. The funds preform no differently if bought directly from Fidelity or not.

Virgin's FTSE All Share tracker has a TER of 1%, and I believe the cheapest at the moment is HSBC's at 0.27%.

Although 0.73% might not seem like much when its £7.30 from a £1000 investment, but its surprising how much you save from a small difference over a couple of years.

Fidelity is a fund supermarket!! It is of course a major provider of funds as well.

jimjames

Linton wrote: »

Fidelity is a fund supermarket!! It is of course a major provider of funds as well.

One downside fo Fidelity Fundsnetwork (that I found to my cost) is that they only do transfers out as cash not as stock so you are out of the market if you need to change to a different provider.