HSBC FTSE All Share Tracker Fund

masonic

Vortigern wrote: »

Don't they have an account closure fee?

They do if you choose to close your account.

jimjames

masonic wrote: »

They do if you choose to close your account.

And if you transfer. Only way to avoid fees is to move out as cash but that loses ISA wrapper. Not an issue for £500 if you aren't filling the rest of the £15k.

masonic

jimjames wrote: »

And if you transfer. Only way to avoid fees is to move out as cash but that loses ISA wrapper. Not an issue for £500 if you aren't filling the rest of the £15k.

ISA wrapper? That's the first time ISA has been mentioned in this thread. I'm assuming if the OP only has £500 invested with HL and £1150 invested in total, loss of the ISA wrapper is of no consequence assuming of course it is not a Fund & Share account.

Edit: Also worth mentioning if we are talking about an ISA and the OP did want to preserve the wrapper, there is another £25+VAT fee for a cash transfer in addition to the £25 closure fee.

Vortigern

jimjames wrote: »

And if you transfer. Only way to avoid fees is to move out as cash but that loses ISA wrapper. Not an issue for £500 if you aren't filling the rest of the £15k.

HL's Terms say:

Where an Account belonging to you has a valuation of less than £250 and has been inactive for two years or more we reserve the right to close the Account and send you the balance, less the Account closure fee and any other charges that are due.
If you reduce or give the instruction to reduce the level of cash or stock in your Account to a value below £50, we reserve the right to close your Account and send you the balance of the Account less the Account closure fee. Any Loyalty Bonus will be paid in cash following Account closure.

...so you'd have to leave £250 in the account to avoid a forced closure, or keep £50 invested and place an occasional trade.

krish123

masonic wrote: »

ISA wrapper? That's the first time ISA has been mentioned in this thread. I'm assuming if the OP only has £500 invested with HL and £1150 invested in total, loss of the ISA wrapper is of no consequence assuming of course it is not a Fund & Share account.

Edit: Also worth mentioning if we are talking about an ISA and the OP did want to preserve the wrapper, there is another £25+VAT fee for a cash transfer in addition to the £25 closure fee.

I only have my investment in an ISA on my CSD account so the LS 80 fund.

the HL, HSBC fund is not in an isa jus a fund and share account as mentioned.

I have emailed HL todsy to see the costs of moving my money out.

But i need to be sure to use this money wisely.

Do you think it will be a good move to put this money into the LS 80 fund?

krish123

Ryan_Futuristics wrote: »

I think at under £5,000 invested, Hargreaves is cheaper than Charles Stanley (CS only gets appreciably cheaper over £50k)

I'd also say (unless you're a very hands-off investor) the speed and efficiency of Hargreaves' fund dealing has saved me a fortune


On the funds ... I'd say the relative success of the Vanguard fund (being heavily invested in US equities) against the FTSE tracker makes you feel much more positive and optimistic about it

Well, no one knows how this whole QE business is going to play out, but historically, when the US has done this well for this long (when its valuations are this high) it's only returned on average 0.5%/annum over the next decade

In other words, people are paying a LOT more to own US stocks than they are to own UK stocks at the moment, and over 5-15 years, these imbalances generally correct themselves (with the US set to drop about 50% of its value, and the UK potentially to climb)

Generally, with experience, you learn that taking profits from the one that's done well, and putting them into the one that's struggled, works out much better than dropping the loser


I prefer active funds for the UK market, but otherwise I'd go 1 part each FTSE 100, FTSE 250 and UK Small-caps (okay, let's say an active there, like MFM Slater Growth - negligible extra fund charge split three-ways) ... I certainly feel the Vanguard fund's underweight UK (for UK investors)

So you feel the US part of the fund will fall in value dramatically?
Can it really drop to only yielding 0.5% growth per year?

what does everyone else think about this?

Why has the fund done so well in the past 4 years then?

Im just trying to get an understanding for what your trying to say and the reasons behind it.

masonic

Vortigern wrote: »

HL's Terms say:

...so you'd have to leave £250 in the account to avoid a forced closure, or keep £50 invested and place an occasional trade.

It's an interesting point because many people had a F&S account opened for them, which they never used and still possess. I made use of mine from time to time, but it was empty for at least a year prior to the charges being introduced and I was told I was not at risk of it being closed in this way if I decided to keep it, but opted to close it anyway before the charges came into effect, just in case.

Ryan_Futuristics

:A

masonic wrote: »

How so? HL charge 0.45%, while CSD charge 0.25%. Neither have trading fees when dealing funds. CSD is therefore a little more than half the cost and HL only begins to claw back some of that difference at over £250k.


I couldn't comment on whether HL are quicker or more efficient at fund dealing, having had no experience of their platform, but several others have transferred to CSD from HL and so far there has been no negative feedback.

This isn't Interactive Investor we're talking about.

Going on the latest Telegraph's latest charts



Simulating a basic portfolio with each

The speed of HL today (avoiding the monthly savings dates) has become phenomenal - very often same-day funds dealt and settled, making unit trusts really appealing vs ETFs ... All free/frictionless - dividends paid instantly ... And also a much wider selection of funds than most - it means I can do many thing I used to have to use ETFs for, much cheaper

masonic

krish123 wrote: »

Do you think it will be a good move to put this money into the LS 80 fund?

krish123 wrote: »

So you feel the US part of the fund will fall in value dramatically?
Can it really drop to only yielding 0.5% growth per year?

what does everyone else think about this?

It's quite possible and what happens in the US could well have significant knock on effects elsewhere. If you look back in history, a fund with a similar composition to VLS80 would have lost about 60% of its value between 1973-4 and then taken another 8 years to return to its previous peak. That is quite an unusual event and subsequent crashes have not been as severe, but that doesn't mean a similar event could not reoccur. If you aren't prepared for that sort of eventuality, then it might be that VLS80 is above your risk tolerance.

In terms of the low growth per year, of course that would be the result of a sharp fall and slow recovery if you had a lump sum invested and held it without buying more. If you intend to make regular contributions, the money you invest at the low points will generate significantly better returns. I once ran a comparison of investing in the FTSE 100 at the peak in 2000 and holding, vs drip feeding steadily from then until now. The difference was something like ~1% for buy and hold, vs. ~6% for regular investment.

Ryan_Futuristics

krish123 wrote: »

So you feel the US part of the fund will fall in value dramatically?
Can it really drop to only yielding 0.5% growth per year?

what does everyone else think about this?

Why has the fund done so well in the past 4 years then?

Im just trying to get an understanding for what your trying to say and the reasons behind it.

The fund's principally done well because the US market's been surging ahead (you'd have done slightly better in a simple S&P500 tracker - tracking the broad US stock market)

Now how much of this US growth is *real* is anyone's guess ... Some would say the US's quantitative easing program is behind most of the gains the US market has seen - I.e. The US has pumped so much money into the economy, and investors have been encouraged to buy stocks because interest rates are so low ... But generally, what goes up tends to come back down again at some point

The other reason it's done well it because bonds have risen in capital (partly for the same reason)

Traditionally, and over decades, the US market has done well for 10 years, then Asia/Emerging has done well for 10 years - it's all quite cyclical - things go in and out of favour

*Some* say now we've embarked on QE to such an extent, we might not let markets fall again ... There'll be some consequence of this eventually, but maybe US markets aren't as vulnerable as they seem? ... Either way, it's quite a lot of eggs in one basket

Historically, the UK (at today's valuations: what people are willing to pay for UK shares) has done a lot better over the next 10-15 years than the US has at its current valuations - but we're very much in unknown territory because of QE, and perhaps because we're seeing a shift in global power towards the East (and how the US handles that is another unanswered question)