Want a very, very simple S & S Isa

yougguy7

dunstonh wrote: »

Well done on investing £40k a year into a pension.

What do you do with your pension seeing as you are paying much more into that?
How is your pension invested if you dont like following investments?

My pension is currently via a provider so I pay an AMC of 1.5% or 1% if I don't want any financial advice. I know this is not the cheapest method, but i just don't want full control and responsibility! Performance has been pretty good in recent years at around 4% growth.

dunstonh wrote: »

They are not investments that should be used by a "lazy" investor. You should be looking at multi-asset funds.

Fair point and I am absolutely a lazy investor. Should I just be done with it and swallow the 1% from a Virgin tracker? When I compare the platform and AMC charges there only appears to be around 0.2-0.3% difference and I suspect I will only increase this to around £50k over the years as I'd rather max out pension, pay off existing mortgage and then possibly get a but to let.

collingbone614

The Vanguard LifeStrategy funds are popular on here. They are very simple - you pick one based on your risk tolerance and then put your money in. That's it. They're based on the level of equities held in the fund. 100% being completely in equities and no bonds, 80% being 80% in equities, 20% in bonds, etc.

LifeStrategy 100% for someone with very strong risk appetite or a young person with a very long time horizon for needing the money. 80% is again riskier, but has the 20% bonds as a balwark. 60% has a reduced risk but will gain less from the "good times" ..

Only thing to think about with these funds is what you then do with it as you get older - i.e. do you move the money into bonds, or leave it as it is.

brendon

yougguy7 wrote: »

Fair point and I am absolutely a lazy investor. Should I just be done with it and swallow the 1% from a Virgin tracker?

My understanding is the Virgin tracker only invests in UK equities, which is a very risky approach (the UK only represents about 5% of the world's equity market). Even if you did want to take this approach, you can get a similar offering with Charles Stanley Direct and a Vanguard tracker for a fee of 0.33%. Suppose you did get your balance to £50k, then you'd be spending £330 per year unnecessarily -- plus, you lose out due to the compounding effect.

That said, I think you should seriously consider the LifeStrategy fund. I haven't used Charles Stanley Direct, but I think you can just search for 'lifestrategy 60' on the website -- click 'Invest monthly' and you should be set up in no time. Total fee is about 0.5% for a well diversified portfolio.

collingbone614

yougguy7 wrote: »

and then possibly get a but to let.

This is definitely one way to make money, and it has broadly returned year-on-year capital growth. Historic returns have been robust. However the pimping industry is not for someone of your stated risk appetite.

bowlhead99

yougguy7 wrote: »

Performance has been pretty good in recent years at around 4% growth.

That's not bad if just for the last year which has been flattish or perhaps an average of the last 14 including a couple crashes, but as an average over the last 5 years which saw spectacular growth, it would be pretty poor.

Fair point and I am absolutely a lazy investor. Should I just be done with it and swallow the 1% from a Virgin tracker?

No, because not only is the virgin tracker very expensive for what it is, it is tracking a pretty un-diversified equity index based on a single country. Like Dunstonh said, and he's an IFA and likely to know his onions: investing solely in just a single country tracker, or trying to juggle a whole bunch of single country trackers, is not great investing and is not suitable for the lazy. You should aim for a multi-asset fund.

A Vanguard "Lifestrategy" fund or a Blackrock "Consensus" fund (the 60or 80 or 85 in the name, referring to maximum percentages of equities in the fund), would be examples of multi-asset funds needing no manual rebalancing because the manager handles it. You should have a look at the types of things they hold in what proportion to ensure you're happy before committing, of course.

Whereas a Vanguard or Blackrock or HSBC or Virgin single country tracker, or whole set of different single country trackers, would be a headache as you have to work out how much of each of them you ought to hold at a point in time and as holdings will change their relative values all the time, it's not buy-and-forget.

The two funds mentioned above are built on trackers but there are lots of active multi asset funds out there. If you look at what fund or funds are held inside your pension, and you're happy with that for hundreds of thousands, you may find that it's quite easy to buy a comparable fund for your £5-50k ISA.

yougguy7

bowlhead99 wrote: »

That's not bad if just for the last year which has been flattish or perhaps an average of the last 14 including a couple crashes, but as an average over the last 5 years which saw spectacular growth, it would be pretty poor.
.

Yes, that's just the last year - I think it is up nearly 15% in the last 3 or so years.

bowlhead99 wrote: »

A Vanguard "Lifestrategy" fund or a Blackrock "Consensus" fund (the 60or 80 or 85 in the name, referring to maximum percentages of equities in the fund), would be examples of multi-asset funds needing no manual rebalancing because the manager handles it. You should have a look at the types of things they hold in what proportion to ensure you're happy before committing, of course.

Whereas a Vanguard or Blackrock or HSBC or Virgin single country tracker would be a headache as you have to work out how much of each of them you ought to hold at a point in time and as holdings will change their relative values all the time, it's not buy-and-forget.

The two funds mentioned above are built on trackers but there are lots of active multi asset funds out there. If you look at what fund or funds are held inside your pension, and you're happy with that for hundreds of thousands, you may find that it's quite easy to buy a comparable fund for your £5-50k ISA.

Big thanks to everyone for their advice, it is probably a little bit of the fear of the unknown. I've looked at the Charles Stanley videos and it seems fairly straightforward so I think I will bite the bullet and start with Vanguard 80 and drip some money in each month. As my confidence (and hopefully money!) grows I can diversify if I feel the urge.

dunstonh

hould I just be done with it and swallow the 1% from a Virgin tracker?

That is just about one of the worst index trackers going. Your adviser could get cheaper than that including their advice charge. It is also a UK equity fund and lacks the diversification of a multi-asset fund.

Archi_Bald

yougguy7 wrote: »

Should I just be done with it and swallow the 1% from a Virgin tracker?

This one gets the worst press possible: http://www.telegraph.co.uk/finance/personalfinance/investing/funds/11067889/Come-on-Branson-give-your-customers-a-better-deal.html

What's wrong with the Vanguard Lifestrategy for your needs?

MadMat

Another vote for life strategy here too, it doesn't get much easier than create an account at Charles Stanley Direct, and fill in the DD form!

I've had 100/month going into the life strategy 80 fund for almost a year now via CS and am very happy with the whole arrangement!

Mat

bowlhead99

MadMat wrote: »

I've had 100/month going into the life strategy 80 fund for almost a year now via CS and am very happy with the whole arrangement!

Of course, I suspect you'd be less happy with it if you'd transferred a £5k lump sum into it and then added another few thousand over the course of the year and then global stockmarkets tanked

It's very easy to get comfortable with an arrangement where you buy a fund and it goes up nearly every month, but less easy to tolerate during downswings where your fund of choice tracks the markets down to the depths. So, while fund houses and fund platforms make it very easy to sign on the dotted line, you do have to exercise some caution in selecting a fund to make sure that the percentages of different types of holdings offered by the product are the percentages and types that you really want.

Sounds like the OP has given into our bullying towards a fund-of-trackers rather than a single Virgin tracker, so that's a good start. This forum should be on a pretty good commission rate from Vanguard, as there must be hundreds of people who have signed up for a Lifestrategy it after reading about it here...

Even though 'fairly cautious view towards risk taking' as he originally stated is perhaps not compatible with being 80 or 100% equities... if he has 40k of cash on the side and relatively large pension assets which are being actively managed or advised, he can probably afford to ride out the peaks and troughs pretty well.