Starter investment portfolio help please

nicknameless

Hi all,

Sorry hugely naieve about these things. I want to start investing for a retirement fund for myself and my partner. Have been reading smarter investing by Tim Hale to try to get a handle on some of the concepts, issues and approaches. We have done some financial forecasts etc. and decided on required income in addition to occupational pensions.

The thing I'm stuck with is how to implement an investment portfolio in the cheapest possible manner and whether a S & S ISA is the best way to do this? The amount we will be investing is within current ISA limits and I would like to avoid the additional costs of an IFA (and finding the right one) eating into a relatively small pot to start with (if this is possible and it is a relatively straightforward task to start and then manage a not too complex portfolio).

I have a broad Idea of a basic mix in a hypothetical investment portfolio but how to implement this in the cheapest manner is my next step.

Can anyone advise on which options I should research further, for example, if I were to invest in index tracker funds for the growth aspect of the portfolio as advocated for in smarter investing?

Any pointers gratefully received.

nicknameless

Ok perhaps a more specific question?

Looking at the H & L vantage isa as an example each of the index tracker funds have a £2 or so monthly charge to hold them. So to hold 3 funds for diversity costs £6 per month (of a £5-600 per month investment in equities) before other fund charges. So diversity costs.

This seems an easy DIY option but is there a more cost effective and relatively simple way to go about this?

Sorry if this is a very simple question but as you can tell I'm new to this.

Lokolo

HL are going to be expensive for just tracker funds with small amounts. However you could choose the Vanguard Life Strategy Funds which are a mixture of Vanguard Tracker Funds in one, so you only have to pay the £2.

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results?companyid=2883&tab=prices&sectorid=&tab=prices&x=16&y=9

This link should work (all I did was search for Vanguard funds);

- 20%, 40%, 60%, 80% and 100% equity funds depending on how high risk you want to take.

I would also point out that depending how much you are putting in, if it's very little then it would be more worthwhile to put it in a managed fund as the £2 cost would be more than the extra fund cost.

(example, £1000 in a 1.5% fund would cost £15 a year, whereas £1000 in a 0.5% tracker with £2 a month charge would cost you £29)

SnowMan

nicknameless wrote: »

Ok perhaps a more specific question?

Looking at the H & L vantage isa as an example each of the index tracker funds have a £2 or so monthly charge to hold them. So to hold 3 funds for diversity costs £6 per month (of a £5-600 per month investment in equities) before other fund charges. So diversity costs.

This seems an easy DIY option but is there a more cost effective and relatively simple way to go about this?

Sorry if this is a very simple question but as you can tell I'm new to this.

Personally I would avoid Hargreaves Lansdown because of their platform fees and because they can't be trusted in my view (as seen by the way they introduced their platform fee and because their marketing literature promoting the funds that pay them the most commission smells badly). HL are good at marketing but what they offer is not great.

I am using the HSBC Global Investment Centre to hold HSBC trackers and that works well for me. You can access the full range of their low cost trackers there, for example amongst my holdings I am holding the HSBC Pacific index fund which has a TER of 0.37%.

I wouldn't complicate things too much if I were you, perhaps starts out with a UK all share tracker (such as the HSBC all share tracker through the Global investment Centre or alternatively the Fidelity Moneybuilder UK index all share tracker bought via Fidelity).

Then think about getting some exposure to non UK markets.

Some links to my other posts about the HSBC Global Investment Centre are

http://forums.moneysavingexpert.com/...&postcount=160
http://forums.moneysavingexpert.com/...73&postcount=6

But note the minimum investment has now been reduced to just £100 since I posted that.

nicknameless

Lokolo wrote: »

HL are going to be expensive for just tracker funds with small amounts. However you could choose the Vanguard Life Strategy Funds which are a mixture of Vanguard Tracker Funds in one, so you only have to pay the £2.

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results?companyid=2883&tab=prices&sectorid=&tab=prices&x=16&y=9

This link should work (all I did was search for Vanguard funds);

- 20%, 40%, 60%, 80% and 100% equity funds depending on how high risk you want to take.

I would also point out that depending how much you are putting in, if it's very little then it would be more worthwhile to put it in a managed fund as the £2 cost would be more than the extra fund cost.

(example, £1000 in a 1.5% fund would cost £15 a year, whereas £1000 in a 0.5% tracker with £2 a month charge would cost you £29)

Thanks a lot for the response - very much appreciated. We have about £900-950 per month to invest with an investment horizon of 19-20 years, and looking at 40-50% equities. Looking for something relatively simple to DIY that limits costs but has some diversity built in. At least that's what I think we should be aiming at

N1AK

I've just started investing some of my liquid assets left over from buying a house and new car. I have done the following, which may act as advice or a warning

I've created a stocks and shares ISA with Cavendish, which afaik is as cheap a discount broker as you can get. I have then bought into two index funds with an AMC of 0.3%, as Cavendish charge no other fees this will be the only cost.

My first step was to invest 10% of my cash in two FTSE All Share trackers. I will be adding another ~50% of my cash in other funds (likely index funds on different markets) or high dividend funds.

I, like you, am looking at this as a longer term investment. I have no interest in checking on fund or share progress on a regular basis and have little faith in actively managed investments given the high fees (and my lack of knowledge to pick 'winners').

Lokolo

I also wouldn't really look at the platform costs massively if you are in it for the longterm as they will be changing a lot over the 2 years as bundled platforms get phased out.

N1AK wrote: »

My first step was to invest 10% of my cash in two FTSE All Share trackers.

Why 2? That's pointless...

N1AK

Lokolo wrote: »

Why 2? That's pointless...

Hopefully it will be There can be considerable difference between the performance of tracker funds because of tracking error (also fees and sampling errors).

nicknameless

Lokolo wrote: »

I also wouldn't really look at the platform costs massively if you are in it for the longterm as they will be changing a lot over the 2 years as bundled platforms get phased out.



Why 2? That's pointless...

Sorry - bundled platforms?

jem16

nicknameless wrote: »

Sorry - bundled platforms?

Bundled platforms where the charge for a fund is bundled up with annual management fee for fund, platform fee and IFA fee.

Unbundled platforms where the costs are charged explicitly.