Choosing a S&S ISA fund

ColdIron

mbbetter wrote: »

Any - what is the minimum investment? Many of them are £500 to get going right?

Many funds have a minimum of £500 (£50 with monthly payments) but the minimum for transfer is £250 so you could put in £500 into one and transfer £250 of it to another if you really wanted to

Jevvers

This thread is interesting, I have been passive investing in a tracker for some years but I am considering being more active. Subscribed.

Any

snowgo wrote: »

If you choose 4 funds on HL watch out for the platform fees. HL charge £2 per month platform fee for many of their funds that have the lowest charges, such as index funds. So with 4 funds you'd be paying £8 per month to HL or buying into funds which levy much higher charges. Higher charges means potentially less growth in your investment.

A way that some folks get round this is by holding one of the Vanguard lifestrategy index funds - this way you can get exposure to different sectors (UK, USA, EU, emerging markets, etc) all in one very low cost fund and only pay £2 per month to HL for having one fund. Vanguard do a range of lifestrategy funds with differing equity/bond ratios, so allowing you to choose one that fits best to your risk tolerance.

Not a single one of the funds I've chosen has a monthly fee.
But you are right, as I've mentioned before some of the funds do have fees on their platform, I've noticed it to be mainly trackers. I still hold 2 trackers without fees though.
It is important to do a research and see what one might want to invest in before deciding on a platform. Better then be caught up later on in the investing life (though sometimes you just cannot avoid it, like when provider decides to change terms suddenly or new legislation!)

EdGasket

I'm with TD Direct Investing. Most funds can be invested in for free and as long as you are regularly trading or have a minimum amount of £5,100 in there, there are no ISA charges. If you set up a regular investment, there are no charges:

http://www.tddirectinvesting.co.uk/choose-an-account/~/media/uk/pdf/rates-charges-upcoming.ashx

jimjames

ColdIron wrote: »

Many funds have a minimum of £500 (£50 with monthly payments) but the minimum for transfer is £250 so you could put in £500 into one and transfer £250 of it to another if you really wanted to

Or setup a DD at £50pm and change the fund after 1 month. That then brings the minimum down to £50. I wouldn't necessarily advocate a huge number of funds with only £50 in but it could be one way to get some balance when your portfolio is small. Remember the £2pm platform charge on HL though. In 12 months you'd lose virtually half (£24) your £50 investment if it was invested in a fund that they levy the platform charge on.

After 2 years (and assuming no growth) you'd only have £2 of your original £50 left and on month 25 your final £2 would be taken as the platform fee so be careful with your fund choice if you go down that route as it could be a surefire way to lose your money!

grey_gym_sock

it can't be worth paying a £24 per year platform fee unless you've got at least several thousand in a fund. there are alternative funds available with a higher TER but no platform fee. when you've got enough in each fund for it to make sense, you can then switch to the lower TER fund with a platform fee. simple!

jimjames

grey_gym_sock wrote: »

it can't be worth paying a £24 per year platform fee unless you've got at least several thousand in a fund. there are alternative funds available with a higher TER but no platform fee. when you've got enough in each fund for it to make sense, you can then switch to the lower TER fund with a platform fee. simple!

Absolutely. But I thought it worth warning as it could be quite easy to make a mistake and then find you are paying massive charges.

Any

grey_gym_sock wrote: »

it can't be worth paying a £24 per year platform fee unless you've got at least several thousand in a fund. there are alternative funds available with a higher TER but no platform fee. when you've got enough in each fund for it to make sense, you can then switch to the lower TER fund with a platform fee. simple!

Completely agree.

HSBC trackers have £2 a month platform fee on HL.
I bought into BlackRock with good record and no fee, slightly higher TER.
Given my £50 a month going into it, the higher TER is in fact much lower fee then the £24 a year!

One just has to read what one is buying into!
And it's not just the monthly platform fees, but also the % payable on buying "into" the fund. I've never yet paid any upfront costs in my ISA, though I know people who regularly do!