Savings Advice Please!

psychic_teabag

If you go with skipton RS, there is now some confusion over whether you can pay 2nd installment before the monthly anniversary. See https://forums.moneysavingexpert.com/discussion/2878202 for any updates on this.

jimjames

benwolves wrote: »

Will bear that in mind thankyou psychic. Regular Saver to be set up tomorow, just (after much reading and deliberation!) opened a S&S ISA with Hargreaves and Lansdowne, £50 per month into one of their managed funds (Income and Growth), fees seemed very competitive.

The HL managed funds are not necessarily good value and many if not most managed funds do not beat the returns from the index. The annual cost (called TER) for the HSBC FTSE tracker is 0.27%, for many managed funds it is 1.5%+ (the HL fund is actually 1.84%) so your money has to grow by at least 1.23% more per year just to cover the extra charges. That might not seem a lot but compounded over many years can really add up.

If you check the performance of the HL I&G fund over the last 5 years the index tracker has beaten it over most time periods. As they say the past is no guarantee of future performance but it is worth considering.

Many managers get more commission etc from selling managed funds not trackers so they don't tend to get mentioned as much. If you decide to change funds it is very easy to do online via their website.

bwlv1

So Jim is the FTSE tracker roughly the equivalent of what i have gone with through H&L?

jimjames

benwolves wrote: »

So Jim is the FTSE tracker roughly the equivalent of what i have gone with through H&L?

If the fund you have chosen is this one

http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hl-multi-manager-income--and--growth-portfolio-trust-income

then no its not the same at all.

The tracker fund just tracks the index (FTSE100) and doesn't rely on a manager to choose which shares to hold. If the manager gets it wrong and buys the wrong shares then the index will beat them.

Having someone to manage the portfolio also increases the costs hence the tracker being so much cheaper as no human intervention is needed at all, just buying the exact shares that are in the FTSE100.

bwlv1

Have had a further think, and cancelled the H&L fund and gone for the tracker, due to like you said just tracking the FTSE 100, then when i get more knowledgable i can select a more varied fund or even choose markets myself.

Thanks again

dunstonh

Have had a further think, and cancelled the H&L fund and gone for the tracker, due to like you said just tracking the FTSE 100, then when i get more knowledgable i can select a more varied fund or even choose markets myself.

Generally the FTSE100 trackers have been poor value. The FTSE all share tracker is a better option. However, the other issue is that you are bouncing around the risk profiles. You should decide your risk first and pick investments to match that risk. Not just pick funds at random irrespective of their risk profile. Whilst the HL funds are generally poor value, the FTSE100 tracker is higher risk.

bwlv1

That was going to be my next question, FTSE 100, 250 or All Share, or maybe another fund? Pacific had been mentioned somewhere but this is a risky one, but i am investing for the long term so i can take a bit of a risk i feel.