Vanguard Life Strategy

hennerz

grey_gym_sock wrote: »

HL's £24 charge has been abolished. it's now 0.45% on all funds instead (well, on the first £250k in funds).

for relatively small holdings (say: up to £32k), all in funds, charles stanley direct would only charge 0.25% (if they have all the funds you want).

for bigger total holdings, look at some of the fixed-cost providers.

or, if you trade very infrequently, look at iweb, with no holding charges, but £5 for dealing (even in funds). which can work out well even for quite small holdings, if you only trade perhaps once a year.

I'm going to go with iWeb, currently I have 6k in ISA and 4k in SIPP on HL, what's the best way for me to go about paying the smallest possible exit fee while moving these from HL please?

Reue

Question for those more experienced than I:

With the ACC fund, the exp. div date is in May. Does this mean that the fund value will spike 1 day by the expected dividend value?

colalba

hennerz wrote: »

I'm going to go with iWeb, currently I have 6k in ISA and 4k in SIPP on HL, what's the best way for me to go about paying the smallest possible exit fee while moving these from HL please?

Make a formal complaint about the exit fee and H-L will almost certainly waive it at the moment. There is a entire thread on this with template letters.

le_loup

Reue wrote: »

Question for those more experienced than I:

With the ACC fund, the exp. div date is in May. Does this mean that the fund value will spike 1 day by the expected dividend value?

No. The acc fund will gradually increase as will the inc fund. (This is because they are collecting dividends from the underlying shares.) On ex-div day the inc will reduce by the value of the dividend the acc fund will stay the same

bowlhead99

Reue wrote: »

Question for those more experienced than I:

With the ACC fund, the exp. div date is in May. Does this mean that the fund value will spike 1 day by the expected dividend value?

Not materially. Example:

Income version
The net asset value (all assets of the fund less its liabilities)is say £101.
It's made up of a £1,000,000 portfolio plus £10000 of cash shared between 10,000 shareholders. They resolve to pay out the spare cash they got as dividends from portfolio companies, as dividends to their fund shareholders.

Next day they go ex-dividend so they owe £1 dividends to each of the shareholders. That £10,000 liability brings down their overall net assets to £1,000,000, or £100 per share. From the shareholders perspective he now has a share worth only £100 but he has £1 receivable which he'll get in due course when the fund spends its cash to settle its liability to pay the dividend. Investors' total value including the money he'll soon receive is unchanged at £101, but the fund share itself is now only worth £100 and on the fund price graph it drops down (unless you're looking at the "total return" version of the graph).


BUT

Accumulation version:

Fund resolves to distribute its annual income as it has to under the rules. It technically goes ex-div on the same day. But its shareholders don't want the £10000 cash to be distributed to them because they would prefer the fund to reinvest it in new investments. So the fund basically doesn't need to pay it, all shares become more valuable than they would have been if they kicked the cash out to investors. They are worth £101 instead of £100.

So you could say the ACC shares spike up compared to the same fund's INC shares because they are more valuable after ex-div day than their INC-paying counterparts. But in reality the value of the ACC shares is whatever they were the day before -it doesn't spike upwards because no value is being created or destroyed. The upwards movements actually happen all throughout the course of the year while the underlying income is earned and the market value of the portfolio businesses increases on the underlying market. Nothing changes to give you any extra value on ex-div day itself.

So, acc shares jump above inc shares, relatively, when the inc ones are about to pay out. But whether the ex-div price of acc shares is higher than when they were being bought and sold including divi rights the day before, is unknown. The market can move a couple of a percent in a day easily, regardless of what is happening at fund / corporate level.

andy013

Thanks for the corrections grey gym sock. I have a questions though:

grey_gym_sock wrote: »

HL have just reduced the minimum amount that will be reinvested to £10. the charge for reinvestment is 1%, with a minimum of £1 and a maximum of £10.

Do you have a source for this? On the HL website it says:

1% (£10 minimum, £50 maximum)
In each account, if you choose automatic reinvestment, any dividends you receive will be reinvested once they reach £200 per share holding.

grey_gym_sock

ah, i hadn't noticed that this change doesn't come in until june 2 ... see http://www.hl.co.uk/lowcharges ...

Automated income reinvestment (funds and shares)
All reinvestments take place when the balance available exceeds £10 (see Terms). This change takes effect from 2 June 2014.
1% (£1 minimum, £10 maximum)

hennerz

grey_gym_sock wrote: »

or, if you trade very infrequently, look at iweb, with no holding charges, but £5 for dealing (even in funds). which can work out well even for quite small holdings, if you only trade perhaps once a year.

Do you know if iWeb have a good range of Vanguard funds? Also the SL GARs fund? I can't seem to see available funds right now.

le_loup

If you can't find what you want to find on their site, it doesn't bode well for the quality of their site!

Fed

Can anybody with Halifax please clarify a few questions (i've emailed them but had no response).

- Have the full range of LS funds now been made available (specifically outside a tax wrapper)?
- Can you set up regular investments into the funds? When I browse them in the research centre they have 'X' next to ShareBuilder which is the regular investment platform. If not is it then £12.50 (under new charges coming in) every time you top up?

Thanks