X-O ISA and Vanguard ETF

billchecker1

Can anyone give advice on the following please: I currently have a portfolio of severalindividual shares, all held in an Isa with X-O.

I wish to diversify and buy some funds and after researchand recommendation I believe the Vanguard ETF offers good value.

Now I can buy within X-O at a cost of £5.95 per trade. I wish to put in around £200pm. The symbol showing is:

VANGUARD INV SERFTSE 100 ETF INC NAV

Can anyone giveadvice on this? How are the costs workedout? Does this ETF reinvest dividends?

I could of coursejust put in £400 per 2 months if that helps to reduce the costs.

Advice isappreciated.

Glen_Clark

billchecker1 wrote: »

The symbol showing is:

VANGUARD INV SERFTSE 100 ETF INC NAV

Can anyone giveadvice on this? How are the costs workedout? Does this ETF reinvest dividends?

I could of coursejust put in £400 per 2 months if that helps to reduce the costs.

Advice isappreciated.

Yes I hold that one.
http://funds.ft.com/uk/Tearsheet/Assets-and-holdings?s=VUke:LSE:GBP
A FTSE 100 ETF with annual costs of 0.1% I have never heard of a lower cost FTSE fund. (Their S&P ETF is even cheaper at 0.09%.) Like x-o its a very cheap very basic service. It does not reinvest dividends, it pays them into your x-o account like shares. It costs you £5.95 per trade to reinvest them yourself so doing it every 2 months would be cheaper than monthly.

(ETFs can only be held in CREST form - you can't have your own certificate as you can with ordinary shares.)

Further info here;
https://www.vanguard.co.uk/uk/mvc/investments/etf
and general ETF info here;
http://en.wikipedia.org/wiki/Exchange_Traded_Funds

billchecker1

Glen, thanks for this. I will buy some within the X-O as I can then keep all my shares in an ISA.

How do they take out the costs? Is it straight out of the dividends? Do they levy an annual charge to the X-O account?

It is a shame that they don't reinvest dividends, however I can always just buy more funds with the dividends.

Glen_Clark

billchecker1 wrote: »

Glen, thanks for this. I will buy some within the X-O as I can then keep all my shares in an ISA.

How do they take out the costs? Is it straight out of the dividends? Do they levy an annual charge to the X-O account?

It is a shame that they don't reinvest dividends, however I can always just buy more funds with the dividends.

Vanguard take 0.1% from the fund per year for their fee, so yes it comes out of your dividends. X-O only charge for buying and selling, and £50 to close the ISA, they don't charge anything for maintaining it.

billchecker1

Glen thanks again. I will look into this.

ds1980

£6 for £200 trades defeats the object of buying a low cost product. Youre 3% down before you start. Even at 1.5% over two months its still v expensive. Either save more and wait until costs are respectable or choose somewhere else. Lots of platforms have regular saving options which is a far better solution for you it would appear. Just need to find one suitable for your needs.