H-L introduces a Tracker Platform Charge

fieldofdreams

gadgetmind wrote: »

Hitting the thanks button?

Already done !

Seriously though this is a great thread which is providing really useful information on a subject that can be very confusing with the all of the different platforms and charging structures that exist, so a big thanks to all that have contributed so far

principa

fieldofdreams wrote: »

, 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?

The dilution levy at .22% ?
at £5K, the first year fee would be approx 0.5% + 0.33% + 0.22% .. not cheap for small amounts.

gadgetmind

principa wrote: »

The dilution levy at .22% ?
at £5K, the first year fee would be approx 0.5% + 0.33% + 0.22% .. not cheap for small amounts.

The dilution levy is your friend. No, really! Either it's charged up-front (Vanguard) or it's hidden in the ongoing tracker error (HSBC). Long-term investors will benefit from paying the dilution levy up-front, whereas those who chop-and-change might be better with higher ongoing fees/error.

We're all long-term investors here, aren't we.

Smiley used because there is no :stern-look: emoticon.

fieldofdreams

Thanks

By dilution levy do you mean the initial charge? i.e for every £100 investment into the fund you would pay a 22p dilution levy?

Also whats does 0.5% charge represent?

principa

fieldofdreams wrote: »

Thanks

By dilution levy do you mean the initial charge? i.e for every £100 investment into the fund you would pay a 22p dilution levy?

Also whats does 0.5% charge represent?

£2 pm = £24 pa ~ 0.5% on 5K

fizio

I have a few HL trackers in my ISA portfolio as part of a long term and low-ish risk strategy and after reading all this Vantage LifeStrategy stuff it seems to me that i should switch everything here?

dunstonh

haf63 wrote: »

I have a few HL trackers in my ISA portfolio as part of a long term and low-ish risk strategy and after reading all this Vantage LifeStrategy stuff it seems to me that i should switch everything here?

If you are low risk then you cannot use HL for trackers as they only offer medium/high and high risk trackers.

fizio

dunstonh wrote: »

If you are low risk then you cannot use HL for trackers as they only offer medium/high and high risk trackers.

depends on definitions as i see trackers as low-ish risk versus individuals shares and investment trusts etc as med/high risk

koru

fieldofdreams wrote: »

Thanks

By dilution levy do you mean the initial charge? i.e for every £100 investment into the fund you would pay a 22p dilution levy?

Also whats does 0.5% charge represent?

The dilution levy is not quite the same thing as an initial charge. It is a specific charge to cover the costs of stamp duty on the underlying investments. Stamp duty is 0.5% on purchases of UK shares, so when Vanguard uses your money to buy more shares it incurs this stamp duty cost. Most funds effectively spread the stamp duty cost across all their investors, whereas Vanguard has a specific levy to pass the cost directly to the new investor. If you are a long-term investor, this means you are only paying your fair share of the stand duty costs, rather than subsidising short-term investors. The 0.22% levy on the lifestyle tracker must reflect the proportion of the UK tracker in the total mix.

principa

haf63 wrote: »

I have a few HL trackers in my ISA portfolio as part of a long term and low-ish risk strategy and after reading all this Vantage LifeStrategy stuff it seems to me that i should switch everything here?

Vanguard LifeStrategy is similar to holding a bunch of trackers with the added benefit of re-balancing, so it is a (more expensive) option.