Vanguard extend ETF range

bigsy

Has anyone found the new Vanguard ETFs (VMID, VERX, VEVE, VNRT) on their platform yet? I know they've only just launched, but I'd probably put my next cash previously destined for HMCX into VMID.

I've looked on IWeb and Youinvest but they're not yet available. IWeb support staff stated they are only currently available from one market maker. I suspect they'll eventually come on-line as IWeb have the other Vanguard ETFs available.

aspiration_2

If one were to hold only Vanguard ETF's, with other shares, then which platform is the most economical (for say a total of £20000)?

bowlhead99

bigsy wrote: »

Has anyone found the new Vanguard ETFs (VMID, VERX, VEVE, VNRT) on their platform yet? I know they've only just launched, but I'd probably put my next cash previously destined for HMCX into VMID.

I've looked on IWeb and Youinvest but they're not yet available. IWeb support staff stated they are only currently available from one market maker. I suspect they'll eventually come on-line as IWeb have the other Vanguard ETFs available.

TD Direct has them (well, I tried VMID and VERX):
---
BUYING 1 of VANGUARD FUNDS PLC FTSE 250 UCITS ETF GBP INC NAV @ £23.6913

BUYING 1 of VANGUARD FUNDS PLC FTSE DEVELOPED EURP EX UK UCITS ETF ACC @ £18.35
---
I didn't actually buy but was able to get a firm quote with the countdown ticker to accept, and then came back a moment later to get a different price etc.

aspiration wrote: »

If one were to hold only Vanguard ETF's, with other shares, then which platform is the most economical (for say a total of £20000)?

If you had a portfolio of shares/funds valued at £20k+ (or a smaller portfolio of which at least £5k is in an ISA), TD Direct which I just mentioned has no ongoing maintenance fees for its trading or ISA account. Downside is high fx fees if you are buying USD or EUR stocks or receiving dividends in those currencies, though they do let you hold foreign currency cash balances in the trading account which makes things more efficient , and they will also let you deal on extended settlement (e.g. I tested just now that I could buy VMID on a T+20 settlement instead of the new standard T+2) for a small premium. I like them as a broker and have used them for several years (more shares than funds or ETFs).

They do charge £12.50 per purchase which is obviously not as cheap as some of the £5-£6 a trade shops, but on a one-off £20k purchase across a few shares and ETFs it's not a huge amount of actual cash. They also support monthly 'regular investment' where you can deal for £1.50 per purchase on certain shares and ETFs, by setting it up in advance and having them deal on a set day with other customer orders at the same time - though I don't use it.

Youinvest, which was mentioned above as not yet having the new Vanguard ETFs available, also don't have an ongoing annual fee for holding shares/ETFs, are only £9.95 a trade, and support the discounted regular monthly investing process at £1.50 too (at least for the existing Vanguard ETFs, and a bunch of x-trackers and iShares etc etc). I use them too.

You can beat those ongoing transaction prices (i.e. the £12.50 or £9.95) with iWeb or X-O.co.uk, but if you were planning on adding monthly, that would lead you to one of the more 'full service' groups using the discounted monthly purchases, IMHO.

If you need the £20k to be inside a SIPP you'll find that different brokers would charge different admin rates for that, but presuming you're just talking about ISA or unwrapped, you wouldn't go too far wrong with TD or (once they start to carry the new ETFs, which I'm sure they will) Youinvest.

aspiration_2

bowlhead99 wrote: »

Youinvest, which was mentioned above as not yet having the new Vanguard ETFs available, also don't have an ongoing annual fee for holding shares/ETFs, are only £9.95 a trade, and support the discounted regular monthly investing process at £1.50 too (at least for the existing Vanguard ETFs, and a bunch of x-trackers and iShares etc etc). I use them too.

Thanks bowlhead99. YouInvest appear to be ok. But I could not get any clear information about their holding charges for Vanguard ETFs, even by phoning. I assume platform fees are only for Vanguard funds and not for ETFs.

ajdj

aspiration wrote: »

Thanks bowlhead99. YouInvest appear to be ok. But I could not get any clear information about their holding charges for Vanguard ETFs, even by phoning. I assume platform fees are only for Vanguard funds and not for ETFs.

There are no holding charges for ETF's or Shares. The 0.2% fee (max £200) is for funds.

As I'm also interested in this Vanguard range of ETF's, can anyone with a You Invest account tell me if there is a minimum investment required? Using the regular investing service (£1.50/trade), it suggests min £25. Is this really the case for the Vanguard ETF's and if I didn't use the regular service is the minimum purchase the same?

bowlhead99

ajdj wrote: »

As I'm also interested in this Vanguard range of ETF's, can anyone with a You Invest account tell me if there is a minimum investment required? Using the regular investing service (£1.50/trade), it suggests min £25. Is this really the case for the Vanguard ETF's and if I didn't use the regular service is the minimum purchase the same?

I've never tried to do a regular investment for less than £25 a trade. I mean, for example if you wanted to do a £15 purchase, the £1.50 fee would be ten percent of your investment, which would be a ridiculously high fee to buy a 'low cost tracker'! Even accepting that it is much better than paying the standard dealing fee of £9.95 which would be two thirds of your £15 investment blown on fees.

So, whatever amount of money you practically want to invest, greater than £25, I'm sure will be fine, as long as it buys at least one share. Unlike with buying units in an OEIC via a fund platform, where you can buy fractions of units, you can't place an order on a stock market to buy less than one share of something - you either want to own a whole share, or you don't. They are charging for the service by flat fee, so to them, it doesn't really matter how many shares you want to buy. The £25 is perhaps a practical lower limit for buying funds, because many funds don't take lower monthly contributions than that, and probably in some cases they want £50. But in reality, you'd be crazy to try to make an investment of only £25 or £50 and spend £1.50 (3 to 6%) as a transaction cost. Save up until you can afford more. By all means just contribute your £50 a month by direct debit if that's easier for planning your household budgets, but set your monthly purchase to £100+ and then it will only execute when you have enough cash on hand in your account to buy a decent amount of investment and have the £1.50 charge be a relatively low proportion of it.

On my point about needing to buy at least one share, when working with ETFs or shares or investment trusts...

If I try to leave a 'regular investing' order for VWRL today, I think it's trading about £40-something pounds. So if I left an order for £25, it would warn me that it's not enough to buy a single share, and wouldn't let me save the order. However, if I wanted to buy shares of the £23 VMID or the £18 VERX, which are cheaper, I expect it would let me leave the order on the book, with the expectation that it would buy one share when it's time to execute the order. Of course, when it goes to try to execute the order in early November, if VMID has gone up from £23 now to £26 then, and my £25 purchase money has to pay £1.50 fees so only has £23.50 available to buy stock, it's going to fail, because £23.50 doesn't buy any shares if they cost £26 each.

Of course, I could just set the order up for £150 on each of the lines of stock and know that it would get me 3 VWRLs at £40something with some change left over, or 5 VMIDs at £26 with some change left over, or 8 VERX at £18 with not very much left over. Obviously if I could only afford £150 a month, there is no point paying 3x £1.50 to deploy the £150 three ways in little £50 chunks every month, so I might do VWRL in month 1, for £1.50 only, then VMID in month 2, and so on.

If you didn't use the regular fixed-date service, and instead paid the higher transaction fees to deal in real time yourself (£9.95 unless you qualify for a discount by being a really heavy trader), the principle is the same. They are making their money by flat fee so they don't care if you want to blow a £9.95 fee on having them buy one unit of VERX for you at £18, or one unit of Tesco plc for £1.80, or 100 units of VMID for £2300. Obviously, the latter is much more efficient.

ajdj

Thanks, would be investing £500/month but didn't want to find a hidden minimum investment for the Vanguard ones after I'd signed up as I intend to split the allocation. Won't be doing anything less than £100 trades.

masonic

masonic wrote: »

I'm still waiting for my VUSA dividend. It's now been over 2 weeks and no sign of it. Seems II is even more broken as a platform than I thought...

Finally credited today at 16:37...

VUSA, due 26/09, paid 15/10 (almost 3 weeks late) £0.090119 per share ($0.14911), so conversion rate was 0.604. The exchange rate went from 0.612 on the 25th to 0.616 on the 26th, so all I can say is the fee was probably between 1% and 2%. If converted after 26th, then the fee is likely 2% or more since the rate has been on the rise since then. I've already sent them a query about the exchange rate and conversion charge when I was chasing up the dividend - if and when I receive a reply, hopefully that will clarify things, because the last dividend seemed to come up a little short as well.

masonic

I've had a response to my query about the conversion rate...

The payment was received in USD and converted to GBP at an exchange rate of 0.604408 which was our banks rate on 30 September 2014.

We did not take any commission on the FX conversion of this dividend.

Compare that with the rate according to Google of 0.6168 and it looks pretty likely that a 2% load has been added by the bank. Also it is clear they had the money in their bank account by 30th September, so I'm awaiting their explanation as to why it did not reach me for another two weeks...

SnowMan

I've updated the dollar dividend conversion rate google spreadsheet with my latest Vanguard ETF dividend distributions.