H-L introduces a Tracker Platform Charge

moneylover

SnowMan wrote: »

Thanks, thought i had been seeing things when the charges disappeared.

There was nowhere for them to take charges from for me as I am solely invested in accumulation units and have no loyalty account balance etc. But it looks like they have actually been taken (as well as displayed) for investors in a different situation to me and will need to be refunded?

I have no cash balance either and probably lots of other people dont either so how will they take the £2 a month from my HSBC tracker if I still have it after the end of December?

moneylover

gadgetmind wrote: »

Good to see the Vanguard LifeStrategy on there. £24 a year for those is a bargain!

I think you have to pay £12.50 to buy as well. I am looking forward to some articles appearing about these funds if they are a bargain and to balance whatever H-L say on the new tracker part of their website about them which I havent read yet. Is the idea that if you are a passive investor you pick a package that seems the best for your investing strategy? I had never heard of these funds till the very recent discussion.

Ark_Welder

gadgetmind wrote: »

Are you asking if you can hold a tracker in a Stocks and Shares ISA? If so, then yes, very much so. All you can't hold in a S&S ISA is cash or anything "cash like".

Not all shares can be held in an ISA: only those that are listed on a recognised exchange. AIM is not a recognised exchange, for example. However, AIM shares that are also listed on another exchange that is recognised are eligible, e.g. Toronto.

There are/were consultations going on about changing the status of AIM but I think that 'talk' is as far as it has progressed so far.


http://www.hmrc.gov.uk/isa/faqs.htm#24
http://www.hmrc.gov.uk/fid/rse.htm
http://www.hmrc.gov.uk/fid/table1-rse.pdf

koru

moneylover wrote: »

I think you have to pay £12.50 to buy as well. I am looking forward to some articles appearing about these funds if they are a bargain and to balance whatever H-L say on the new tracker part of their website about them which I havent read yet. Is the idea that if you are a passive investor you pick a package that seems the best for your investing strategy? I had never heard of these funds till the very recent discussion.

No, there is no dealing fee.

koru

SnowMan wrote: »

So all I am saying is that the rebalancing shouldn't be done precisely but gradually based on principles of keeping transaction costs down. If using derivatives keeps costs down then that is fine also.

If the fund weightings are different to the index weightings because the rebalancing isn't done daily that is fine. Any underweighting or overweighting because the rebalancing isn't done immediately can result in underperformance or overperformace relative to the index with equal probability.

My hunch is that the extra volatility through not rebalancing, relative to the volatility in the index itself, is very small and it doesn't justify the additional costs to remove that volatility.

Ignore me, I was confusing rebalancing with replication.

SnowMan

moneylover wrote: »

I have no cash balance either and probably lots of other people dont either so how will they take the £2 a month from my HSBC tracker if I still have it after the end of December?

If you log into your account in the account administration tab you can locate this question. Although this relates to their annual management charge it probably also relates to the platform fee

How do you collect these fees?
Once a month or more regularly, we sweep your account for outstanding fees. By default we will attempt to collect this money from income on this account and if there is insufficient income we shall collect the fee from other cash you hold in the capital account, then loyalty bonus followed by any other ISAs you hold and finally your Fund & Share Account.

There is an option to pay the fee by debit card available through the account administration tab

It also says in the terms and conditions

A19 'Outstanding Fees and Unpaid debts- ............we have the absolute right of sale of investments in your Account (including those held in joint names) to meet amounts you owe to us. You will be notified in advance of this being done and you will be given the opportunity to specify which investment(s) you would like us to sell...........

gadgetmind

There's a good article here regards the Vanguard LifeStrategy.

http://monevator.com/2011/10/18/vanguard-lifestrategy/

and here is a Vanguard article on how they chose the asset balance.

https://www.vanguard.co.uk/documents/adv/literature/target-allocation-appproach.pdf

Is the idea that if you are a passive investor you pick a package that seems the best for your investing strategy? I had never heard of these funds till the very recent discussion.

Yes, very much so. There are ways you can get fancy, maybe holding two LifeStrategies and life styling between them, and maybe holding a few "a la mode" active funds alongside, but LifeStrategy is designed to be a low-fee version of the traditional "balanced managed" pension fund.

Elsewhere, someone said that a LifeStrategy fund investment "needs less maintenance than an Easter Island statue", which tickled me pink!

gadgetmind

Ark_Welder wrote: »

There are/were consultations going on about changing the status of AIM

I have bought and sold enough AIM stocks to know that corporate governance is KING when it comes to equities.

I broke even on one (just!) amid curious court cases and talk of dodgy wills and mystic arts, lost another to a pre-pack, and five-bagged another despite several nasty scares. The rest were just volatile "meh" that I ditched on their rare good days.

With fun money, maybe, with ISAs and pension, not for me!

fieldofdreams

This announcement has come as a bit of a surprise, perhaps HL are concerned about the number of people that have/are thinking about jumping ship following the recent tracker platform fee changes

Been studying the options and although the SWIP tracker has a rock bottom TER (0.11%) for someone like myself with around £1000 in a UK tracker the £2 a month platform fee still makes it a fairly expensive option for a single fund investment

Dont know much about Vanguard but having read the links posted by gadgetmind the Lifestrategy fund looks appealing. I currently hold 3 HSBC trackers covering UK, USA and Pacific Ex Japan (also held Japan but Ive since transferred that into another fund), so an investment into the Vanguard Lifestrategy would continue to give exposure to these areas with the bonus of only having to pay one lot of the £2 platform fee per month.

Have I missed anything?

gadgetmind

fieldofdreams wrote: »

Have I missed anything?

Hitting the thanks button?

Assuming HL don't change charges again, the Vanguard LifeStrategy funds look like a well-balanced, low-cost and flexible option.

I'm (hopefully!) sorted with Bestinvest, and won't be jumping ship in a hurry unless things change, but I'll seriously consider this as an option for my wife's pensions and ISAs.