Stocks & Shares ISAs

masonic

Nart77 wrote: »

I’m extremely new to all this but want to start investing using a S&S isa, This is where the confusion starts lol. My main goal at the moment is to invest some money into some of vanguards funds and hopefully have some individual stocks else where at a later date. Now my question is could I open a s&s isa with say Barclays and still invest both ways using that account or am I way off the mark? I know I can open a vanguard s&s isa but I think I’m restricted to just their funds?.

If you want the flexibility to hold different types of investment from different providers, then go with a neutral provider like Barclays (there are cheaper alternatives to research, for example iWeb, Charles Stanley Direct, AJ Bell)

You can open a Vanguard S&S ISA, then in a future tax year open one elsewhere for other investments, but this restricts you to paying into only one of them in any tax year.

dekkard

Some questions about opening a S&S ISA with Vanguard and investing in their 80% Lifestyle fund.

Their documentation says: "We also keep the first 0.20% of the interest we receive on cash held in your account".

Does that mean the actual platform charge is 0.35%, not 0.15% ?

"Transaction costs" (of 0.10%) are also mentioned.

Are these charged every time I pay in to the ISA?

Thanks for any thoughts/comments.

TheShape

dekkard wrote: »

Some questions about opening a S&S ISA with Vanguard and investing in their 80% Lifestyle fund.

Their documentation says: "We also keep the first 0.20% of the interest we receive on cash held in your account".

Does that mean the actual platform charge is 0.35%, not 0.15% ?

"Transaction costs" (of 0.10%) are also mentioned.

Are these charged every time I pay in to the ISA?

Thanks for any thoughts/comments.

If you've got cash in your account it will be held on deposit. If those deposits earn any interest, Vanguard will keep the first 0.2% of the interest to help pay their costs, with any extra credited to you. Unlikely to be very relevant as you'll probably not hold much cash in your account.

Platform charge is still 0.15%.

"Transaction costs" (of 0.10%) are also mentioned.

These are costs that are internal to the fund that are just part of managing that fund. You don't need to worry about them as they are not an extra charge.

Your only charges are platform charge of 0.15% + Fund charge.

stevest_2

I invested the minimum £800 plus £100 a month with them just to pick up the bonus (MSE tip 6 months ago). I am surprised they are not making money as their offer is very simple and I cannot see why they would have much by ways of costs. One way they definitely make money is by holding onto my cash before they invest it. The latest £100 left my bank on 22 August and has not been credited to my investment account yet (28 Aug). I complained about this and got 'see the Ts & Cs'. My noddy math says they if keep the use of everyone's money for a week then they a have a nice piggy bank of 2% of total client annual investment available to invest on their own account. Just saying. On the other hand they have made me £90 on an average of £1000 invested over 6 months (10/10 investment risk selected)

eskbanker

stevest wrote: »

I am surprised they are not making money as their offer is very simple and I cannot see why they would have much by ways of costs.

A simple proposition from a customer perspective doesn't necessarily mean cheap for them to create and run, but as per earlier posts they aren't particularly cheap when compared with the more mainstream full-service brokers so yes, should be in a position to capitalise on that.

stevest wrote: »

One way they definitely make money is by holding onto my cash before they invest it. The latest £100 left my bank on 22 August and has not been credited to my investment account yet (28 Aug). I complained about this and got 'see the Ts & Cs'. My noddy math says they if keep the use of everyone's money for a week then they a have a nice piggy bank of 2% of total client annual investment available to invest on their own account. Just saying.

Hardly surprising that they point you towards the Ts & Cs where they do indeed specify three business days (of which this is now the third after a bank holiday weekend), but even if they did have access to your money for a week on average, the notion that this is 'a nice piggy bank' available for them to invest for their own benefit is pretty far-fetched!

Iain_For

dekkard wrote: »

"Transaction costs" (of 0.10%) are also mentioned.

These costs have been made more transparent this year due to regulatory changes, but as noted above, are internal to the fund so not part of the platform charge (0.15%) or ongoing charge (0.22%), though they do impact on the total cost of investing. You can see the full list of Vanguard transaction costs and other costs and their effect on the total cost of investing here:

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges-2018.pdf

dekkard

Iain_For wrote: »

These costs have been made more transparent this year due to regulatory changes, but as noted above, are internal to the fund so not part of the platform charge (0.15%) or ongoing charge (0.22%), though they do impact on the total cost of investing. You can see the full list of Vanguard transaction costs and other costs and their effect on the total cost of investing here:

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges-2018.pdf

Thanks. Would these transaction costs apply regardless of which platform I went through?

bowlhead99

dekkard wrote: »

Thanks. Would these transaction costs apply regardless of which platform I went through?

Yes, the fund is incurring them when it buys and sells its underlying assets which it holds in the portfolio.

It is not you incurring them through the choice of who you'd like to buy the Vanguard fund through.

cyrilsneer

Hi,

I have £20k and would like to put it into a Stocks and Shares ISA for the next five years. I am hoping for growth of the capital sum over this period.

I have read the info on MSE but have absolutely zero experience of this world and would appreciate someone cutting through all off the unnecessary info and giving me some basic guidance.

It seems that 'Cavendish' is a good vehicle through which to buy 'Fidelity' funds (someone who's opinion I rate told me that he always uses Fidelity). Can anyone give me an idea of which funds would make a good, sensible spread in my circumstances, please?

Many thanks in advance if you are able to offer an opinion or advice.

Alexland

Cyrilsneer,

5 years is the CII definition of 'short term' so you are on the border of when investment would be suitable. If the markets crashed near the start they may not have recovered by the end of the period.

If you were investing between 5 to 10 years I would suggest you consider the globally diversified Vanguard LifeStrategy 60 accumulation fund. On a 60% shares and 40% bonds mix you should expect average annual returns around 3.5% above fees and see temporary losses up to 25% during the period. In addition your exposure to foreign exchange is less because the bonds are mostly GBP hedged.

https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/markets-economy/why-investors-prepare-for-lower-returns

Cavendish charge an ongoing percentage fee so are better for small sums and regular trades. For a £20k lump sum it would be cheaper to buy the fund with a fixed price platform such as iWeb.

https://www.iweb-sharedealing.co.uk/share-dealing-home.asp

Alex