H-L charging structure

jamesd

Porcupine, yes that was the one. A caution: I haven't read the research behind it yet. Yes, I know of RAFI and I think it's one of the more popular alternative indexes in the US.

I'm sorely tempted to try to correlate this from the summary of the paper with the rise in the popularity of cap-weighted index trackers over the same period: "since the late 1990s the market-capitalisation weighted index has proved to be a relatively poorly performing investment strategy".

lentrix92 for a small amount a month you're better off not using a Vanguard fund. The holding or trading costs will be too high as a percentage of the amount invested. Other funds and maybe periodic moves every few years would end up being cheaper, if cheap is your objective.

lentrix92

jamesd wrote: »

Porcupine, yes that was the one. A caution: I haven't read the research behind it yet. Yes, I know of RAFI and I think it's one of the more popular alternative indexes in the US.

I'm sorely tempted to try to correlate this from the summary of the paper with the rise in the popularity of cap-weighted index trackers over the same period: "since the late 1990s the market-capitalisation weighted index has proved to be a relatively poorly performing investment strategy".

lentrix92 for a small amount a month you're better off not using a Vanguard fund. The holding or trading costs will be too high as a percentage of the amount invested. Other funds and maybe periodic moves every few years would end up being cheaper, if cheap is your objective.

£50-100 p/m was thinking. I like the format of VLS. And it will be long term.

jamesd

At that level it'll probably be years before it pays to use that fund under HL's current charging scheme.

You'll probably also be a loser from any changes, unless they introduce commission-level payments for low value fund holdings. Losing for you would be things like a fixed platform charge or dealing costs for your purchases.

At your 100 level the £24 a year platform charge is 4% of your average balance in the first year. Not the 0.4% or 0.2% level typically mentioned for passive funds but ten times that. It'll take you years to get to the point where £24 a year is down to negligible levels - takes a £24,000 average balance to get it to 0.1%. Ignoring growth that's 20 years of £100 a month.

sabretoothtigger

% fees are great for the smaller pension people. Anyone under 100k is a pauper
The big dogs should try speaking to a good IFA as I believe that can be cheapest and quote a cost beforehand

lentrix92

JamesD

What would you suggest then?

I want to invest that amount into the mkt each month and want a similar fund to the VSL.... what are my options?

I already put max cash into isa's / top acc's etc. The above is 'spare' cash that I want to put to use......

jamesd

Look for commission paying funds that don't have that platform charge. Then once new rules come in, look for a place that has no platform charge and low dealing costs and buy once a year to keep down the costs. An ETF or two is more likely to work well elsewhere, with perhaps £6 purchase price for an ETF once a year at some places like maybe x-o.

bigadaj

lentrix92 wrote: »

JamesD

What would you suggest then?

I want to invest that amount into the mkt each month and want a similar fund to the VSL.... what are my options?

I already put max cash into isa's / top acc's etc. The above is 'spare' cash that I want to put to use......

With small sums then another provider might be good, I've just put money into vanguard funds through Charles Stanley direct and they look ok, mine was lump sum though.

Look at the compare fund platform tool on candid money site, its not perfect or comprehensive but provides an indictatiom of provider costs for particular funds at levels of investment.

Porcupine

There's the Blackrock Consensus range of funds - a similar idea to LifeStrategy, more expensive at about 0.6% but there's no platform fee to pay.

jimjames

Just seen this absolute classic on the HL website. Referring to the Lindsell Train UK fund.

Since launch in July 2006 the fund has risen 114.5%, compared to 44.8% for the FTSE All Share Index, although past performance is not a guide to future returns. We rate Nick Train and Michael Lindsell highly, but we would like to monitor the fund for a longer period before considering it for inclusion on our Wealth 150 list of favourite funds across the major sectors.

So this fund with a 7 year track record needs to be monitored for a longer period before inclusion yet the Lindsell Train Global fund with no track record went on the 150 immediately. I wonder if the difference in the AMC is any clue!

Get your story straight guys!

Gaaraz

I'm looking to buy some Aberdeen Asian Smaller Companies shares - looks like they cost £5.95 as a one off per trade, so buy as much as I can in one go? Thanks