Vanguard Life Strategy

westy23

Good morning
As the vanguard life strategy unit price is very expensive,
how does it work with monthly saving of £50?
Do you just buy a part unit with Hargreaves landsdown.
Thanks

mf78

Caprylate wrote: »

I'm thinking of setting up a Vanguard Lifestrategy 80% accumulation fund (age 23). I would want it to be in an S&S ISA.

This will be my first S&S ISA and I can deposit maybe a few hundred pounds into it and afterwards have a monthly direct debit for at least £50, though could easily double it and go with a £100 each month.

Would HL be the best for that scenario? £2 a month charge seems quite steep a percentage when it won't be a large sum.

The other option is just to hold off until the new tax year and transfer my cash ISA from this year into an S&S ISA, if TD allow it, I could transfer enough to get over the £5,100 figure which I think reduces the charges etc?

I'm investing £100pm into the 80% one like you intend to, and the cheapest platform I found for it was Charles Stanley Direct. They don't charge dealing fees for investing in funds and only a 0.25% annual holding fee, which is peanuts when you start out and the amount you have invested is small. In a few years once the pot has grown it may work out cheaper to move elsewhere.

I've been happy with their service so far. The only issue is if you try to setup a monthly payment into a VG fund where the cost of 1 unit is more than the monthly amount you intend to invest, the online system throws up an error. But you just have to send them a message (through their online system) and they set it up at their end. They acknowledge this is a system error and are trying to sort it, but its not really a major problem.

Caprylate

mf78 wrote: »

I'm investing £100pm into the 80% one like you intend to, and the cheapest platform I found for it was Charles Stanley Direct. They don't charge dealing fees for investing in funds and only a 0.25% annual holding fee, which is peanuts when you start out and the amount you have invested is small. In a few years once the pot has grown it may work out cheaper to move elsewhere.

I've been happy with their service so far. The only issue is if you try to setup a monthly payment into a VG fund where the cost of 1 unit is more than the monthly amount you intend to invest, the online system throws up an error. But you just have to send them a message (through their online system) and they set it up at their end. They acknowledge this is a system error and are trying to sort it, but its not really a major problem.

Just had a look on the site. Seems to be much better in pricing than the HL. S&S ISA opened!

The last price bit was 125.88 so I decided to set the direct debit up for £130 a month, I can afford that if I dump less money into my premium bonds each month!

black_taxi wrote: »

I would keep cash isa as emergency fund/savings

As regular monthly savings into vanguard fund grow,the platform fee as a percentage will lower.

your young,get rich slowly

I have sufficient savings as an emergency fund, easily enough living expenses for several months, no debts*, credit cards paid off in full each month via direct debit and only buy what I have cash in the bank to pay for. Credit rating on Experian of 972.

I've made more money from my premium bonds in the last 3 months than I have in my Cash ISA for this tax year (also my first ever ISA). Maybe instead of transferring the cash ISA to S&S ISA, I'll just chuck it into PB and have easily accessible cash. I keep cash more easily accessible that way?


*student loan @ 1.5% interest coming out of gross pay doesn't count as a real debt!

latecomer

minimumcost wrote: »

Me and my partner have 2 ISA portfolios and a SIPP in tracker funds with Cavendish. The asset allocations is similar to VLS 80. As far as it can ascertain the he total cost (annual management plus TER) is around £7k per year on £700k(ish) of investment. If I transfer it all into 3 x VLS 80 funds through HL the costs come down to less that £2k per year. There are also initial charges of around £1500.

Compounded over 10 years that's a huge difference in performance. Am I missing something? Am I taking a risk in putting all my investments in Vanguard?

One thing to be wary of is that HL will be changing their pricing in the near future so if you were thinking of doing this it would pay to wait until this had been announced.

Other than that I dont see any problem with the idea provided its giving you the same kind of diversity you have already/want.

If you haven't already check out monevator.com's fund broker comparison table

Rollinghome

latecomer wrote: »

One thing to be wary of is that HL will be changing their pricing in the near future so if you were thinking of doing this it would pay to wait until this had been announced.

That's a important point. Hargreaves Lansdown said they would announce their new fee structure (to comply with RDR2) by the end of November but so far they haven't done so.

The general consensus seems to be that the new charges will be somewhere north of 0.5%. Additionally, whereas it's free to move from Cavendish/Fidelity, HL will hit you for £25 per fund to move out again in specie, so 3x £25 = £75. So would be wise to wait and see.

minimumcost

Latecommer and Rollinghome... thanks of the replies. Very useful. I spoke to Tim Hale... (very very nice man) and I've just read The Random Walk Down Wall Street. It would seem to me that as passive investing gathers pace the charges (inc HL's) should come down rather than up. If we agree with the 'passive' experts I can't understand why the average investor would not go for pure index tracking of a representative global portfolio.

Furthermore, it seems like putting all your money into and single portfolio fund rather than a portfolio of individual trackers has a cost advantage that outweighs any advantage you might get from alternative asset allocation.

It's just a bit scary having only one fund (VGLS) to do that in the UK. There are others, but they're only available through IFA's who charge fees that depress your portfolio value.

black_taxi_2

changing fee structures --(:>(

minimumcost

I was reading a bogleheads thread about index investing in the US. It seemed to suggest that a single balanced fund such as VGLS is more expensive that making up you own portfolio of individual fund to get a similar asset allocation. Is this true?

mf78

minimumcost wrote: »

I was reading a bogleheads thread about index investing in the US. It seemed to suggest that a single balanced fund such as VGLS is more expensive that making up you own portfolio of individual fund to get a similar asset allocation. Is this true?

It can be. I think the TER of a VGLS fund is ever so slightly higher than the average of the individual funds that make it up. However, it will all depend on platform costs. If theres a charge each time you buy a fund, or a charge just to hold each fund, then those costs will rack up. So I guess it will depend on how much you will have invested.

black_taxi_2

I think its tax implications if you do it outwith 401,our isa allowance