My first portfolio strategy

Noktok

No, I haven't yet but will now that I'm feeling a bit more confident about my choices, thanks for reminding me!

crimsonfin

Noktok wrote: »

Hargreaves Lansdown - Reasons: cheap for managed funds with 0% initial charges on many funds as well as a partial commission rebate, also they do not charge for switching funds and there are good reports on usability of online tools.

First of all, thank you very much for posting such a detailed plan. I too am planning on getting into the investments game and your post has made me realise that I should really think more about what I am investing in rather than buying some random funds.

Something that confuses me about setting up a fund with HL is the discounts/charges for setting up the funds. Most seems to be 0% setup fee with just an annual charge and TER to consider. From what you say above if you were to move your funds around in say a years time HL do not charge anything for this ? Am i missing something or where do they make their money from ?

I too am looking to invest £5100 (ISA) and had planned only investing in a single fund. You however have 5 different funds. Is the only benefit of buying multiple funds that you spread risk ?

Off to do some more proper fund reasearch now!

Noktok

crimsonfin wrote: »

Something that confuses me about setting up a fund with HL is the discounts/charges for setting up the funds. Most seems to be 0% setup fee with just an annual charge and TER to consider. From what you say above if you were to move your funds around in say a years time HL do not charge anything for this ? Am i missing something or where do they make their money from ?

I too am looking to invest £5100 (ISA) and had planned only investing in a single fund. You however have 5 different funds. Is the only benefit of buying multiple funds that you spread risk ?!

HL don't charge for switching funds which is one of the main reasons I chose them above, say, Cavendish Online, who do have a switching charge but would otherwise have been cheaper due to bigger rebates. HL do keep part of the trail commission, they only rebate 0.1-0.25% out of 0.5% to us, but as I understand it they also have other hidden arcane commission systems to get their money - and it all might be changing pretty soon due to the Retail Distribution Review that's going on.

Spreading money across different funds and different sectors does spread risk, the less correlated the funds the more the risk is spread.
Somebody with more experience can probably explain this better than me

crimsonfin

Thanks for the reply.

I have been struggling to find any tangible online examples (or case studies) which show some hypothetical figures of "£x invested for y years at z% growth less charges/fees of a/b/c .. gives of total profit/loss ... " kinda thing for the various investments and markets which are available.

Just want to be sure I fully understand what Im getting into having only just started to get to grips with all the finance speak and acronyms :-)

Good luck with your investment NokTok

psychic_teabag

Noktok wrote: »

HL don't charge for switching funds which is one of the main reasons I chose them above, say, Cavendish Online, who do have a switching charge but would otherwise have been cheaper due to bigger rebates. HL do keep part of the trail commission, they only rebate 0.1-0.25% out of 0.5% to us, but as I understand it they also have other hidden arcane commission systems to get their money - and it all might be changing pretty soon due to the Retail Distribution Review that's going on.

Do H-L also get a separate cut of the AMC by providing the platform ? I might be making this up, but I was reading the cofunds T&C recently for some reason, and that says that of the typical 1.5% AMC, the manager keeps around 0.5%, the platform (cofunds) gets around 0.5% and the financial adviser gets around 0.5%. So if H-L are acting as both the financial adviser and the platform, they'd actually be getting around 1% of the AMC (but then pass on around 0.25% loyalty bonus).

But I might have got completely the wrong end of the stick here.

Noktok

Yep I remember reading something similar, the AMC gets carved up by several parties all with their fingers in the pie. I think Dunston has also hinted that there are other hidden fees and commissions going on in the background, frankly the only thing that really matters to me is who can give me the cheapest deal and the best service for my needs!

Noktok

I opened accounts with iii and HL last night, in a bid to make sure I get my ISA allowance through before the end of the tax year. III could only offer me a transfer date of 1st April, all other available dates were in the next tax year so I hope that gets processed on time.

My browser crashed halfway through the HL application :mad: They've got my money but I didn't get to set up any account options or get an account reference! Hopefully I should be able to sort it out once they send me my account details through the post.

JamesU

Noktok wrote: »

I opened accounts with iii and HL last night, in a bid to make sure I get my ISA allowance through before the end of the tax year.

I would be very interested to know what range of Vanguard etfs you can purchase on iii when you are sorted. Also is it correct that trading non-LSE etfs (US/EU) is not possible at £1.50/trade, but costs £15/trade?

In due course plently of EM etf options through LSE depending on the range that is offered by iii. For some more specialised EM and sector diversifier etfs, need US and EU exchanges though.

Good luck with the setups.

JamesU

Noktok

Thanks JamesU. I've heard that iii might not offer the full range of ETFs but I haven't looked into it myself beyond checking that the ones I want are available.

I ran the portfolio through Morningstar as recommended and spotted a glaring error straight away - the Lyxor fund is commodities, not property! I've kept it and replaced the ETFS All Commodities fund with iShares FTSE EPRA/NAREIT Global Property Yield. (Edit: Bit of confusion. I think what actually happened was I picked two commodity funds by accident after I couldn't find the Lyxor Real Estate ETF on iii)

The x-ray breakdown was thus:
Region: UK 34%, Europe 23%, America 24%, AsiaPac 19%
Sector: Financial 22%, Industrial 15%, Healthcare 12%, Consumer Goods 12%, Telecoms 11%, Energy 10%
Large Caps 78%, Mid caps 16.5%, Small caps 3.5%

That was with an equal 10% weighting in UK, America, Europe and Pacific trackers. I feel that it should be heavier in America and lighter in AsiaPac, so I will change those weightings to 15% and 5% accordingly.

The x-ray also highlighted that I'm looking very light on the Tech sector. I'm not sure whether to include a tech-specific fund to balance it out. I know I originally didn't want to focus on specific sectors, but I wasn't expecting to be quite so underweight in it!

DS0

Hi Noktok

Excellent thread.

Summarised a lot of the issues I am grappling with succinctly and intelligently. Don't let the 'campers' distract you.

I would be really interested to nkow your 'final selections' both funds and platforms as my circumstances are largely similar to yours.

Please could you let us know?

Many thanks
DS0