Advice on tracker funds please!

black_taxi_2

great thing about vanguard lifestyle it auto-rebalances your portfolio,and at low cost,

im older so doing 60/40

Marazan

black_taxi wrote: »

http://monevator.com/vanguard-lifestrategy/

Yeah, for small amounts of money it's pretty hard to beat the equity market diversification you get from the Life Strategy funds. If you have more to invest then the higher TER cost to invest in the Life Strategy fund over buying funds yourself would chafe.

Perelandra

If your investment pot is low, it's difficult to get access to the Vanguard LS funds cost-effectively.

EDIT: Rest of the nonsense deleted.

Marazan

Perelandra wrote: »

If your investment pot is low, it's difficult to get access to the Vanguard LS funds cost-effectively.

I'm investing £50 a month in a Vanguard Lifestrategy fund via Charles Stanley Direct who charge 0.25% (on the first half million pounds at least!) on all funds. I think that's the cheapest that RDR compliant brokers are doing at the moment for small investors.

Perelandra

Marazan wrote: »

I'm investing £50 a month in a Vanguard Lifestrategy fund via Charles Stanley Direct who charge 0.25% (on the first half million pounds at least!) on all funds. I think that's the cheapest that RDR compliant brokers are doing at the moment for small investors.

Oops. For some reason, I hadn't seen that one.

I've deleted my post, rather than spare people the time in reading something irrelevant... this option is, indeed, a suitable way of accessing the fund!

Marazan

Perelandra wrote: »

Oops. For some reason, I hadn't seen that one.

I've deleted my post, rather than spare people the time in reading something irrelevant... this option is, indeed, a suitable way of accessing the fund!

One note for people who want to do this right now, when I tried to setup my £50 a month investment the online system rejected it as £50 is less than one unit of the fund. I messaged support and it turns out that that is a temporary bug they are fixing and they manually setup the £50 montly payment for me.

Hooloovoo

With Fidelity for example, it's important to remember that the "£250 minimum monthly payment" that many funds have for a monthly payment is, in fact, the absolute minimum for your payment, not the minimum into the fund.

Say you want to invest in five funds:

HSBC FTSE All Share Index
HSBC European Index
HSBC American Index
HSBC Japan Index
HSBC Pacific Index

Each of these funds have a minimum monthly topup of £250. But Fidelity are quite happy for you to pay £50 into each fund, making your total payment £250.

You can even go lower than that. At one point when I was investing £250 my contribution to one fund was as little at £15.

There's no reason at all you can't diversify when making only small monthly payments. Having said that, the OP will still most likely struggle with only £100 per month to invest.

amyparr

Quick question - don't most platforms charge you for dealing each time you buy new shares in a fund? So if you are investing monthly, you will be hit with a dealing charge each time?

What is the most cost-effective way of investing say £100 per month in a tracker fund in an ISA?

TCA

amyparr wrote: »

Quick question - don't most platforms charge you for dealing each time you buy new shares in a fund? So if you are investing monthly, you will be hit with a dealing charge each time?

What is the most cost-effective way of investing say £100 per month in a tracker fund in an ISA?

Some platforms have regular savings schemes where you pay £1.50 or £2 per monthly purchase.

dunstonh

Quick question - don't most platforms charge you for dealing each time you buy new shares in a fund?

No. However, some models do. Mainly those that are stockbroker focused. Those that are funds focused tend not to.

What is the most cost-effective way of investing say £100 per month in a tracker fund in an ISA?

Depends on the tracker. However, direct to fund house is probably the cheapest way for something like that.