Complete Novice Needs Advice Regarding Index Trackers

frothy-coffee_2

Hi,
I've got some money on cash deposit and would like to put some money in a simple tracker fund.

1) How do I go about picking one?

2) Where do I buy one?

hbakhshi

Should be fairly easy, Index trackers are a dime a dozen, usually with charges at or below 1%.

Decide which index you want to track and then buy a fund. HSBC are usually good, I think they have annual charges around 0.25% hard to beat. The offer FTSE 100, All share and from memory FTSE 250 as well.

I used to have a FTSE index tracker with Virgin Money which did me quite well for a number of years.

Alternatively you could buy Index tracker ETFs, which have no management charge and no stamp duty. You buy and sell these as shares so you could invest in a number of tracker shares.

I currently have DB X-Tracker FTSE 250 shares. If you go this route a discount broker like X-O is good, you pay £5.95 to buy the tracker shares, no stamp and no ongoing management fees.

Too choose you could do a lot worse than going to Google and typing the words Index Tracker into the search box, then refine for UK only results. I've just done this and there are some pretty good articles on there.

psychic_teabag

Main MSE site doesn't really cover investments. http://www.candidmoney.com/investment/default.aspx has quite a good intro to investing, with suggestions for where to buy, etc.

You may want to hold your investment in a stocks-and-shares ISA . Unless you make large profits, or are a higher-rate tax payer, there's not a huge benefit in using an ISA but, unless you choose a provider which charges extra to hold the funds in an ISA, there's no reason not to go with an ISA. Here's an article on the thisismoney site : http://www.thisismoney.co.uk/investing/article.html?in_article_id=500175&in_page_id=166 (though it must be an old article since the annual limits are wrong).

jimjames

Hargreaves Lansdown or one of the similar fund supermarkets are a good place to start.

I use the HSBC range of trackers as they have low charges compared to others like Virgin.

Which one depends on your attitude to risk and where you are happy to invest money. UK ones mean you don't have any currency risk.

frothy-coffee_2

Many thanks to you all for the good advice and the links.

I feel more informed already! Although it will take me a while to digest the information. BURP!!!

Newbie2saving

Whichever tracker you decide on, look at the TER which is the cost involved. The higher the TER, the more you are paying out in charges. Over time this will erode profits. I had a Fidelity Moneybuilder tracker, changed to HSBC due to their low charges (I'm with H-L). I've found H-L to be great for my portfolio needs, a mixture of passive (index) and active funds, easy to manage yourself online, any issues (my lack of knowledge mainly!) they have been very efficient.

Good luck, let us know what you decide on.

easterbunni

I hold a range of the HSBC index trackers in a 'Funds ISA' from Halifax Sharedealing http://www.halifax.co.uk/sharedealing/products/self_select_funds_isa.asp

Free to sell and buy, just pay the annual charge There are no fees to hold the Funds ISA either

frothy-coffee_2

Hi,
All the various permutations and industry jargon seem like a bit of a 'dark-art' to me.

I need to get a good overall grasp on what's what before I dip my toe in the water.

Brrrrrrrr!!!

psychic_teabag

http://www.investopedia.com/university/beginner/ has a dictionary section with acronyms and other definitions, which might help (or might make things worse !)

frothy-coffee_2

Thans,

I've been looking for a decent book on Investing. But a lot seem to be American , ”I can make you rich' motivational books.

I just want a simple UK guide to investing.

JamesU

frothy-coffee wrote: »

I just want a simple UK guide to investing.

You cannot go far wrong with these two books which are very good. First is more generic but contains a fair bit on fundamental principles to be aware of with investing and asset allocations, second focuses more on index trackers and funds. Would recommend both for sure. Have a look on Amazon.

http://www.amazon.co.uk/Smarter-Investing-Simpler-Decisions-Results/dp/0273722077/ref=sr_1_1?ie=UTF8&qid=1297367623&sr=8-1

http://www.amazon.co.uk/Financial-Times-Guide-Exchange-Traded/dp/0273727834/ref=sr_1_1?ie=UTF8&qid=1297367566&sr=8-1


JamesU