Low cost tracker funds NOT in ISA/Pension ?

EalingSaver

Hi. I have a 'legacy' endowment policy - no longer needed to cover mortgage (worst financial decision I ever made). Not a with profits etc. I want to extract the funds but don't really want to end up with the cash: i'd like to get it reinvested into some form of low fees tracker fund. I want to do this outside of ISA or pension. I have previously struggled trying to find low cost tracker funds other than inside ISA or pension wrappers. Anyone know where I can go ?

BTW reasons for wanting to do: a) I believe the fees I'm paying (not transparent as I suspect the major part is in the cost of the underlying funds) are more than I will get with tracker b) this is a non-qualifying policy: my thinking is if I get it into a different fund in future i can make use of capital gains when I want to sell tranches of it whereas at the moment any profits are income tax chargeable.

Aegis

If you can get funds inside an ISA you can get them outside too. What tracker funds have you found that you'd like to invest in?

dunstonh

The same places you have looked with the ISA and pension should offer unwrapped accounts as well.

BTW reasons for wanting to do: a) I believe the fees I'm paying (not transparent as I suspect the major part is in the cost of the underlying funds) are more than I will get with tracker b) this is a non-qualifying policy: my thinking is if I get it into a different fund in future i can make use of capital gains when I want to sell tranches of it whereas at the moment any profits are income tax chargeable.

Doesnt explain why you wouldnt use an ISA

middlepuss

Should be a simple matter of ringing up eg HSBC and buying the units I'd have thought? http://www.assetmanagement.hsbc.com/uk/individuals/contact_us.html

jamesd

Platforms like Hargreaves Lansdown have exactly the same trackers available inside and outside the pension and ISA wrappers.

You should still try to use your full S&S ISA allowance for them to avoid CGT risk and the need to track all sales and purchases. Selling one tracker and buying another which tracks the same thing can be used outside a tax wrapper to use the annual CGT allowance and reduce the chance of accumulating a large CGT gain.

EalingSaver

dunstonh wrote: »

Doesnt explain why you wouldnt use an ISA

Agreed - it was meant to explain why I would take it out of the endowment. 1. Current sum too much for one year ISA contribution 2. I'm currently in a positoin where I can utilise my annual ISA and pension allowances independent of this, (though the reality is I've generally not been utilising my SS ISA allowance, with the exception of this year but that went into a self select platform).

EalingSaver

Aegis wrote: »

If you can get funds inside an ISA you can get them outside too. What tracker funds have you found that you'd like to invest in?

At the moment my personal pension is with L&G and invested in a variety, but currently bulk is in a straight FTSE all share tracker. For this sum I could be interested in a variety: whether simple UK all share or small company, or something more esoteric e.g. perhaps an element in emerging market tracker. My problem to date - when I last investigated is I struggled to find tracker funds outside of ISA/Pension: but from the replies here it looks like I've been delinquent in my searching.

EalingSaver

jamesd wrote: »

Platforms like Hargreaves Lansdown have exactly the same trackers available inside and outside the pension and ISA wrappers.
.

Thanks - I have now found the index tracker part of HLs website. I noticed on here the SWIP All Share. This has a very low TER. Leaving aside debate on whether a UK all share is a 'good' investment, anyone have any experience of this particular tracker fund, and thoughts on why the TER on this is siginificantly than other comparable tracker funds ?

jamesd

There's not much chance of experience with it because it only just launched. So we won't see how it does on tracking error for a while yet. Watch out for the £24 a year platform charge for holding the fund at HL, which says it is the only place making it available.

grey_gym_sock

SWIP appeared at about the same time that Vanguard funds were becoming available through HL. it looks it was designed to undercut Vanguard FTSE UK Equity Index (with 0.11% vs 0.15% TER).

i'm not complaining! obviously, lower charges are better for investors.

however, there might be a case for preferring the slightly more expensive Vanguard fund. Vanguard do have a good long-term record of running trackers well, and in particular at eliminating hidden costs.

EalingSaver

jamesd wrote: »

Selling one tracker and buying another which tracks the same thing can be used outside a tax wrapper to use the annual CGT allowance and reduce the chance of accumulating a large CGT gain.

Interesting: I hadn't picked up on this first time I read your post. Are you saying that if you hold a fund (in this case tracker) you can effecctively do a Bed and Breakfast i.e. sell and reinvest to wipe out 'to date' CGT? I guess logically the answer to that has to be yes, had just not occurred to me. Anyway, I'm a whiles of being in that posiiton but a good thought to hold.