With whom to invest a tracker-heavy portfolio?

jimjames

Some interesting research there. Although HL do charge a 0.5% annual fee for some tracker funds (Fidelity) this is not the case for HSBC and others. As such I can't see any reason why you would not use HL for trackers as HSBC offer a complete range so there should not be any that you require that they do not offer.

Best Invest would charge a switch fee if you wanted to rebalance or change tracker funds so I would think HL was still the better bet.

I have ISAs with both BI and HL and the HL website is far better for transactions ie switching, buying and selling. Some of the reports on BI are better but ultimately HL is far easier to use.

It really depends how balanced you want it, HSBC trackers cover all major markets and by varying the proportions you can be as adventurous as you want; bonds are not offered but that can be covered by managed funds or using L&G trackers.

Noktok

jimjames wrote: »

Although HL do charge a 0.5% annual fee for some tracker funds (Fidelity) this is not the case for HSBC and others. As such I can't see any reason why you would not use HL for trackers as HSBC offer a complete range so there should not be any that you require that they do not offer.

HSBC trackers aren't the cheapest on the market (although they're not unreasonable either) and don't offer for example a global or emerging markets tracker. I agree they are probably the most hassle-free option though!

jimjames wrote: »

I have ISAs with both BI and HL and the HL website is far better for transactions ie switching, buying and selling. Some of the reports on BI are better but ultimately HL is far easier to use.

Thank you! Ease of use is an important factor and will definitely influence me.

SteveY_2

Fundsnetwork also offer a "High-value client pricing option". This will give you no initial charges and no switching fees. Currently for free, but changing to £45 pa later this year.
Use Cavendish so that all trail commission is rebated.

www. fidelity. co. uk /adviserservices/in-focus/high-value-client-pricing-option.page

Can anyone find a better deal than this?


Quoting directly from the above link:
"The key points you need to know:

• No initial charges on lump sum investments into ISAs and collective investments submitted online
• No switching fees on all transactions submitted online
• Available for new or existing clients who have assets of £50,000 or more on the platform
• Available for top-ups which take clients over the £50,000 threshold
• Eligible assets for qualification include ISAs, collectives and any money held in the CashManager Account, SIPP, Investment Bond and International Bond
• Paper-processed ISA transfers are also eligible
• An annual fee of just £45 will be introduced but not until the second half of 2011. This fee will be frozen without indexation until at least June 2013.
• No impact to commission terms"

masonic

Noktok wrote: »

HSBC trackers aren't the cheapest on the market (although they're not unreasonable either) and don't offer for example a global or emerging markets tracker. I agree they are probably the most hassle-free option though!

Global can be simulated using a combination of US, UK, Europe, Japan and Pacific trackers. Personally I like that level of granularity since I can adjust the weightings to fit in with other funds I hold. For emerging markets, there is the Legal & General one, which doesn't attract the 0.5% charge, but the TER is something like 1%, so it probably doesn't offer much advantage over a managed fund.

dunstonh

For emerging markets, there is the Legal & General one, which doesn't attract the 0.5% charge, but the TER is something like 1%, so it probably doesn't offer much advantage over a managed fund.

Blackrock have a good emerging markets tracker. The Class D is cheaper than Class A with a TER of 0.29%. I cant recall the class A off the top of my head but it will be cheaper than L&G. The problem will be finding an bundled platform that offers them. Typically, to get the best tracker selection, you need an unbundled platform.

Noktok

masonic wrote: »

Global can be simulated using a combination of US, UK, Europe, Japan and Pacific trackers

Yes but that would be subject to a minimum regular investment in 5 separate funds which I think would skew my allocation respective to the rest of the portfolio.

dunstonh wrote: »

Blackrock have a good emerging markets tracker. The Class D is cheaper than Class A with a TER of 0.29%. I cant recall the class A off the top of my head but it will be cheaper than L&G. The problem will be finding an bundled platform that offers them. Typically, to get the best tracker selection, you need an unbundled platform.

It's a hard fund to find. Certainly I can't find anybody who offers it at discounted initial charge. However it looks like it might not be valid for an ISA wrapper which would rule it out for my initial investment.

dunstonh

It's a hard fund to find. Certainly I can't find anybody who offers it at discounted initial charge. However it looks like it might not be valid for an ISA wrapper which would rule it out for my initial investment.

Its a hard fund to find certainly on the bundled platforms but many. It is available for ISAs (as are all the blackrock trackers). I suspect the bundled platforms would carry the class A version mostly (as they get a cut of the AMC). The class D is the institutional version and I only know of unbundled platforms or hybrid platforms that offer it.

Noktok

Hmm I've found the class A on iii for fully discounted initial charge and 0.55% AMC, 0.69% TER. But it says ISA: No.

dunstonh

I have used the class D in an ISA. The only difference is that the Class D is institutional and the Class A is retail. Financial Express show the ISA'ble status as no information (left blank). I suspect iii have taken no data supplied as being "No" rather than "dont know". The data being supplied for the emerging markets fund is missing in quite a few areas when you compare it to the other blackrock CIF trackers. This is not uncommon for relatively new fund launches.

masonic

Noktok wrote: »

Yes but that would be subject to a minimum regular investment in 5 separate funds which I think would skew my allocation respective to the rest of the portfolio.

You didn't mention that you were planning to drip-feed. This could still be done, but it depends on how small your investment is. In theory you could just put £50 per month into the American tracker, then every few months transfer 20% of your new contributions to the Europe, 20% to the UK and 10% the Pacific funds etc (with whatever weightings you felt appropriate). Obviously, this is much easier when lump sum investing - just stick, say, £1000 into one fund and then carve it up into smaller chunks to fit your target allocations (though you'd need to drip feed into at least one fund to get around the £3000 minimum for a new ISA).