Low charges tracker?

Froggitt

On the assumption that all trackers were created equal, which ones have the lowest charges? I'm thinking of buying a S&S ISA tracker thru Cavendish......any reasons why not?

Radiantsoul

They are different in many different ways.
If you are just starting out and planning on drip feeding then a small increase in your rate of contribution is going to have a bigger difference than the charges you pay.

They have different charges, indexes they track, policies with regard to derivatives, etc.

HSBC, Blackrock and Vanguard are worth a look.

koru

Have a look on the Monevator site

jimjames

Froggitt wrote: »

On the assumption that all trackers were created equal, which ones have the lowest charges? I'm thinking of buying a S&S ISA tracker thru Cavendish......any reasons why not?

I think Cavendish is about the cheapest available at the moment certainly for smaller portfolios. No additional platform charges and HSBC and Fidelity trackers available.

WendellG

I am thinking the same, I plan to use the full S&S ISA allowance as a lump sum each year. I assume that means my trading costs will be low but I just want to buy tracker funds (Vanguard etc).

Which platform/tracker is best for this?

Froggitt

I dont see Vanguard on Cavs site. Here's a couple.....

HSBC FTSE 100 Index Acc - Annual Management Charge (AMC) 0.25% Total Expense Ratio (TER) 0.27% Trail Commission (100% rebated by CavendishOnline) 0

Fidelity MoneyBuilder UK Index Fund A-Accumulation - Annual Management Charge (AMC) 0.1% Total Expense Ratio (TER) 0.3% Trail Commission (100% rebated by CavendishOnline) 0

grey_gym_sock

cavendish don't offer fully clean funds, such as vanguard.

for UK all-share trackers, they have the HSBC and fidelity tracker you mentioned; or blackrock UK equity tracker class A (TER 0.57% - 0.2% rebate = 0.37%).

so HSBC is ahead on price for those 3.

there are cheaper clean all-share trackers, e.g. vanguard have 1 at 0.15% TER. but you'll pay a platform fee (either as a % or in GBP) on top of that, with any provider who has clean funds. so currently, dirty is cheaper until you get up to a large total investment.

but why do you want to limit yourself to the UK? or is that just as an example?

Linton

What do you want to track? Decide what you want to invest in first and then find the best vehicle.

donniej

Whilst Vanguard have got great funds, they're not the only game in town when it comes to trackers. HSBC and L&G have got great offerings that are widely available. Vanguard really shine when you consider their LifeStrategy funds; I don't think anyone else offers a passive managed fund. however, you can easily replicate this by looking at what they're invested in, and buying the individual trackers yourself. This document shows which sectors the LifeStrategy funds are invested in: https://www.vanguard.co.uk/documents/adv/literature/target-allocation-appproach.pdf - so you could buy tracker funds to replicate this allocation, and get similar results to the Vanguard funds.

The beauty of tracker funds is that they track an index; so whilst there are variations, specifically cost and tracking error, the variations are usually small, so you should be able to replicate an asset allocation quite easily.

donniej

grey_gym_sock wrote: »

there are cheaper clean all-share trackers, e.g. vanguard have 1 at 0.15% TER. but you'll pay a platform fee (either as a % or in GBP) on top of that, with any provider who has clean funds. so currently, dirty is cheaper until you get up to a large total investment.

I think that's the biggest secret in the industry currently - when you invest in 'dirty' share classes for trackers, you don't pay the investment provider anything at all! (Unless they have a separate charge, like HL, iii or ATS.) So options like Cavendish, rplan or ClubFinance (in order of cost) which don't sell 'clean' share classes are much, much cheaper than iii, ATS or HL for trackers.

Perelandra

If you want a single Vanguard LifeStrategy tracker, then HL will work out the cheapest for most. If you want Vanguard, but want more than a couple of different funds, then it gets more complicated. HL also have their unique SWIP Index tracker, which is unbeatable for a UK index (but does come with the HL platform fee, so even with the exceptionally low AMC, it may not work out cheapest for low-value investors).

For most other trackers, I find Cavendish to be cheapest (as has been said above), but you will be limited here to "dirty" funds and no shares, so might not be best for mix 'n match investors.