Stocks & Shares ISAs

Archi_Bald

http://monevator.com/category/investing/passive-investing-investing/ for you?

Brand

Hi can't give advice, obviously, as illegal, but opinion is, if you think stockmarket investment will do well, and wish to keep it simple, to look first at

Brand wrote: »

. . . For the thought-free, start with fundsmith, which is a single simple fund with an isa wrapper possible.. . . .

It is designed to be low cost and, if his choice of shares is correct, to be left alone. You can look up the fundsmith thread on this board, and research Terry Smith yourself, including his various videos and podcasts and articles. hwindsor suggests legal and general, also on page 2 of this thread as an alternative fairly passive approach to the stockmarket. You can also research investment savings schemes, how to save for a child and how to save for uni.

JackFB

Did any one read the Warren Buffet comments recently? Didn't he say that if he was to advise his Widow's Trustees then he'd recommend an S&P 500 tracker index fund. 80% in this fund and then some Govt gilts? Simple and over the long term a solid return?

Scarpacci

JackFB wrote: »

Did any one read the Warren Buffet comments recently? Didn't he say that if he was to advise his Widow's Trustees then he'd recommend an S&P 500 tracker index fund. 80% in this fund and then some Govt gilts? Simple and over the long term a solid return?

Yes. It's good to see somebody as influential as Buffett behind passive trackers. Still, although his plan is broadly good and inline with passive ideals, it's very much a plan for a particularly rich American widow.

The choice of tracking just one of the world's markets, albeit the key one, wouldn't make sense for British people - who would be wise to have a global portfolio. Depending on their risk tolerance and time away from retirement (if that's the aim), it would be probably wiser to start with a UK tracker at the core (though I would not recommend anywhere near 80% in UK) and then work outwards from there.

The share of the portfolio in stocks, rather than bonds/gilts, would be very high for many people - depending on their age and goals - in a way that it isn't for somebody as financially secure as Buffet's wife. As a plan it is simple and likely to be effective in those circumstances, but it's very much a plan for a unique situation.

Brand

confused_and_green wrote: »

I am finding the information too much for a novice . . . . I have been investing in a S&S's ISA through Fidelity since 1999, . . . to pay off the mortgage capital . . . I intend to try and reduce some of the costs and change some of the funds. I intend to move to Cavendish on line having read the article in the 1st instance and want to continue to drip feed into the ISA.. . . .
What I would like to achieve is to accumulate some funds for my daughters Uni fees/house deposit which are probably 10 & 14 years away . . . articles in the papers don't go into enough depth and I am interested in the passive portfolio. My risk appetite is Medium as I have other savings and will probably use the max allowance this year and next year but probably stop after that. . . .

Hi, very sorry to truncate you! Just wanted to add that for Fundsmith Equity it is slightly cheaper to go direct, so you can buy T class units whereas if you go via Cavendish or other provider you have to buy R class and, with the platform fee, works out slightly more.
The MSE article assumes share investment will be "self-select" or "DiY" using a fund provider ISA or stockbroker ISA, but you can of course, forgo some flexibility and go direct to a fund house. (e.g. Back in 90s many newbies went direct to Virgin for our tracker fund, if you remember
For such people it may still be too complex to organise a tracker via a platform, let alone combine a fixed income approach also.
Two points to ponder slightly off ISA issues:
you started out in 1999, just before the market topped, so do you think an adviser would be any better, on this crucial issue of timing! this time?
I'm not as lucky as you are to have children, but if I had, then I think I would be planning which uni will she want to go to, then thinking which house can I buy nearby to run as a good student letting. Remember, all this money you carefully scrimp and ISA will otherwise end up in the grubby pockets of a mean landlord for a shabby rental.

liver-bird

As a rule of thumb, if you want to invest in (say) three funds from the same provider, is it cheaper to get an ISA directly from them or to use a fund supermarket?
There seem to be so many ways, I am finding it hard to tell. Thanks

Brand

liver-bird wrote: »

As a rule of thumb, if you want to invest in (say) three funds from the same provider, is it cheaper to get an ISA directly from them or to use a fund supermarket? Thanks

Sorry by ISA fund provider I should have said ISA fund supermarket (i.e. Cavendish, h-l, etc). I think you mean same asset management group (or "fund house"), i.e. those who do all the big adverts, such as L&G, Fundsmith, Fidelity, Artemis, Jupiter, etc .
Snowman helpfully points to this article on the topic http://www.candidmoney.com/guides/10/guide-to-using-fund-supermarkets and the same question is asked on the HSBC thread. I suppose you just look up the cost going via Cavendish and Interactive Investor and compare to the cost of going direct and then weigh up the ease of changing your choice of funds.

liver-bird

Yes, I did mean that - sorry! I'll read that. Thanks

Archi_Bald

liver-bird wrote: »

As a rule of thumb, if you want to invest in (say) three funds from the same provider, is it cheaper to get an ISA directly from them or to use a fund supermarket?
There seem to be so many ways, I am finding it hard to tell. Thanks

Many fund providers would either not provide ISA wrappers, or they might not even sell their funds directly. Some who do sell directly will only do so for minimum investments which are far in excess of an annual ISA allowance.

jimjames

Archi_Bald wrote: »

Many fund providers would either not provide ISA wrappers, or they might not even sell their funds directly. Some who do sell directly will only do so for minimum investments which are far in excess of an annual ISA allowance.

And many that sell direct still charge 5% or so initial charge which would wipe out much of the saving anyway.

liver-bird wrote: »

As a rule of thumb, if you want to invest in (say) three funds from the same provider, is it cheaper to get an ISA directly from them or to use a fund supermarket?
There seem to be so many ways, I am finding it hard to tell. Thanks

So the answer is that it is normally cheaper to go via a fund supermarket but like normal supermarkets the price can vary considerably from Aldi to Waitrose so take your pick as to which you prefer.