Unwrapped Vanguard ETFs and Index Funds - Best Platform?

TCA

snowcat53 wrote: »

Given the extra cost of the fund over the ETF why wouldn't one always go for the ETF (where there's a choice)? Even allowing for the cost of reinvesting dividend.

I'm not sure the index fund and the corresponding ETF are always identical. e.g. from the ATS website:

Vanguard Emerging Markets Stock Index has Fund Benchmark MSCI EM NR USD and Vanguard FTSE Emerging Markets ETF has Fund Benchmark FTSE Emerging TR USD.

When looking at the composition of both, the ETF seems more heavily weighted towards Latin America and Africa and less so for Asia. According to my sums anyway.

snowcat53

TCA wrote: »

I'm not sure the index fund and the corresponding ETF are always identical.
.

No they (often?always?) aren't but some are similar enough that it might not make a vast difference and either could be chosen - eg FTSE all share vs FTSE 100. In this case the fund route hits you with a 0.5% initial hit unlike the ETF. The question is - are there enough advantages of the fund to make this worthwhile ?

koru

You might want to consider Interactive Investor. They charge an account fee of £20 per quarter, which is more than £12 (including VAT) at ATS, but there are at least three ways in which the cost advantage of ATS might disappear. First, Interactive Investor give you a £20 credit which you can use to pay for dealing costs, so if you do one deal per quarter at ATS that's an extra £12.50 cost, so a total of £24.50 per quarter, compared with £20 at Interactive Investor. In fact, Interactive Investor charges £10 for each buy or sell, so you could do two transactions per quarter and still be paying £20, compared with £37 at ATS. Second, any extra transactions are cheaper, at £10 compared with £12.50. Third, if you or your family need another account (ISA account, investment account for spouse?) you pay another £12 per quarter at ATS, but you pay nothing at Interactive Investor.

Turning to the question of who is RDR ready. Following RDR and the implementation of the platform review changes, companies like this will not be able to receive trail commission or platform commission. ATS and Interactive Investor both say that they fully rebate all of this commission to the investor, so they are already fully reliant on the direct fees that they charge to investors. In that sense, they are already compliant, although once there is no longer any commission on funds there will no longer be any need for them to rebate it to the investor. (This does not mean they won't hike their fees. ATS recently did just this.)

Stanley_St

koru wrote: »

You might want to consider Interactive Investor.

I have been considering this company as a home for my Vanguard/HSBC trackers (wrapped), but as far as I can see they offer few if any of these funds on their platform. Not sure why.

bigfreddiel

have you considered tddirectinvesting?

koru

Stanley_St wrote: »

I have been considering this company as a home for my Vanguard/HSBC trackers (wrapped), but as far as I can see they offer few if any of these funds on their platform. Not sure why.

If you look, you will see they are available. eg https://www.iii.co.uk/investing/factsheet/G1XE
https://www.iii.co.uk/investing/factsheet/M271

They don't appear in the list of fund rebates because there is no commission, so no rebate, on these funds

JohnRo

koru wrote: »

If you look, you will see they are available. eg www.iii.co.uk/investing/factsheet/G1XE
www.iii.co.uk/investing/factsheet/M271

They don't appear in the list of fund rebates because there is no commission, so no rebate, on these funds

iii offer very few Vanguard funds, for example last I checked on my client account before closing it very recently there were only two of the possible ten available Lifestrategy funds actually available to purchase, their various trackers are even more sketchy and certainly not well enough represented to consider iii a suitable platform for building a portfolio of such things. All imho and experience ofc.

TCA

koru wrote: »

If you look, you will see they are available. eg https://www.iii.co.uk/investing/factsheet/G1XE
https://www.iii.co.uk/investing/factsheet/M271

They don't appear in the list of fund rebates because there is no commission, so no rebate, on these funds

I couldn't for the life of me work out how to check whether they had the Vanguard ETF selections. If they do, I find their website very user unfriendly in hunting them down. That aside, I won't be trading frequently, so probably ATS with lower holding fees, will still suit me better.

bigfreddiel wrote: »

have you considered tddirectinvesting?

TD doesn't appear to have the full range of Vanguard products. No sign of the global small caps tracker index fund or emerging markets stock index fund. And again I couldn't work out how to search for ETFs. It appears they don't charge holding fees (except for inactive accounts of less than £7.5k) and appear to have made some changes towards RDR:

"From 1st July 2012 any Trail Commission received by us from the Fund Manager will be rebated in full to your appropriate account as cash on or after 31st December 2012. A Platform Fee may be charged against the value of your fund holding as follows":

Funds paying Trail Commission of 0.5% or more annually 0.35%
Funds paying Trail Commission of less than 0.5% annually Nil

So with a balance of over £7,500 you could buy and hold Vanguard Index trackers (excluding those with initial charges) with nothing other to pay than the TER? Can that be right?

grey_gym_sock

it looks like TD don't have any vanguard funds, but do have some vanguard ETFs. this would make sense, because they would literally be paid nothing on their current charging model if they did let you buy the funds (if you have a balance over £7,500); but for ETFs, they can charge dealing commissions, the same as for shares in general.

TCA

grey_gym_sock wrote: »

it looks like TD don't have any vanguard funds, but do have some vanguard ETFs.

If you open their Fund Screener via here http://www.tddirectinvesting.co.uk/tools-research/funds-research/ you can search on UK Domiciled Funds and Vanguard and end with this:

http://lt.morningstar.com/e4e1fvybwy/fundscreener/results.aspx?LanguageId=en-GB&Universe=FOGBR%24%24ONS_152&Company=0C00003GNE&CurrencyId=GBP

How did you get into their ETFs?

Edited to say I can find the ETFs via the Quick Rank tool which again leads to a Morningstar page, but it all still seems hellish messy to get to this information and I'm still not 100% this is actually TD's offerings I'm seeing!

http://lt.morningstar.com/e4e1fvybwy/etfquickrank/default.aspx

A bit of a summary here below about them and some others from June:

http://monevator.com/no-fee-discount-broker-options/