Buying index funds through II for the first time

Imnoexpert_2

Having made the move from HL to II I am ready to buy some index funds.

If I look at for example HSBC FTSE All Share I see various share classes.
HSBC FTSE All Share Index A Acc
HSBC FTSE All Share Index C Acc
HSBC FTSE All Share Index Inst Acc
HSBC FTSE All Share Index Ret Acc

C I and R seem available to buy.
C is the clean class I planned to buy with an amc of 0.10
R has an amc of .25 and a rebate of .10
I has an amc of 0 and a rebate of .10

Can I really buy the I and does it have no amc? I guess not.

Can someone explain?
And are these the best trackers to buy on II

Thanks

I proved again I really am no expert.

bigadaj

The institutional class funds probably above a very high minimum purchase amount, could be into the millions, so if you've got that some then go for it.

The charges though do look reasonable, but I think you have to trawl through the funds to confirm if there is any better, 0.1% is good and means you're only paying £10 per £10k.

masonic

I think the HSBC fund had a relatively high tracking error when I last checked (although not as bad as that terrible SWIP tracker HL got exclusive rights to). The Vanguard FTSE UK Index fund would be worth looking at as the tracking error on this fund has been significantly better. It does have slightly higher AMC than the HSBC class C fund at 0.15%, so it depends what is more important to you.

Surreyboy

Is the Vanguard fund actually an ETF?
I'm not trying to be clever, - I was thinking in investing in that myself (once my transfer from HL to II completes) and I wasn't completely sure if it was a tracker fund or ETF.
THanks

westy22

The ticker VUKE is an ETF. It tracks the FTSE 100.

The ISIN GB00B59G4893 is an accumulation tracker fund. It tracks the FTSE All Share.

yatinsardana

I'm finding something a bit difficult to understand: if you find "similar" funds and ETFs, what are the factors that should help you decide which one to go for?

ETFs seem to be marginally cheaper in terms of TER. The cost of dealing is now the same now that I will be with III. With ETF, it's treated like a stock so you can buy at any point during the market time and the value changes throughout.

But then some articles (one on IC) suggest that some ETFs have a big tracking difference, some articles suggest that there are factors such as cost of rebalancing, dividend policy, cash drag that you have to consider.

I thought investing in funds was to simplify and diversify your portfolio all at once and not to have to think about all those things. Do these factors play an important role in deciding where to invest or should I just go with either?

Linton

yatinsardana wrote: »

I'm finding something a bit difficult to understand: if you find "similar" funds and ETFs, what are the factors that should help you decide which one to go for?

ETFs seem to be marginally cheaper in terms of TER. The cost of dealing is now the same now that I will be with III. With ETF, it's treated like a stock so you can buy at any point during the market time and the value changes throughout.

But then some articles (one on IC) suggest that some ETFs have a big tracking difference, some articles suggest that there are factors such as cost of rebalancing, dividend policy, cash drag that you have to consider.

I thought investing in funds was to simplify and diversify your portfolio all at once and not to have to think about all those things. Do these factors play an important role in deciding where to invest or should I just go with either?

In my view a small new investor doesnt need to worry about such things, the difference they would make would be fractions of a %. My portfolio is relatively large and I only take a passing interest. It is far more important to focus on a sensible overall strategy defining what areas you want your funds to invest in. A bad strategy can cost you 10s of %s.

masonic

yatinsardana wrote: »

But then some articles (one on IC) suggest that some ETFs have a big tracking difference, some articles suggest that there are factors such as cost of rebalancing, dividend policy, cash drag that you have to consider.

Tracking errors are a concern for both types of investment, but historical tracking errors can quite easily be determined. The other potential concern for ETFs is whether they physically replicate the index or are synthetic. I'm not overkeen on investing in something based on a derivative from an investment bank that is therefore subject to counterparty risk.