HSBC FTSE All Share Tracker Fund

jimjames

crystal_pixie wrote: »

I have been following this thread with interest and two things that seems to stand out is as not being discussed.

1. Reputation
2. Usability of the site and the company

I did the same thing looking at costs etc and then I went onto all the platform websites and started to use them. Depending on how you are wired then some sites are better than others.

I like HL because their site is good and they are quick with transactions. They also helped me formulate my initial portfolio for nothing.

Plus HL have been around a while and have a good reputation. Personally this is important. I stopped banking with all the high street banks after some dreadful experiences. I now have to pay for my account with a non UK institution - but I get a good service and I can ring or go and chat with someone. Same goes for HL - although I am lucky to be Bristol based.

I agree those things are worth considering. Going for the absolute cheapest isn't always the best as some seem to have found with III.

HL website is probably one of the best and easiest to use which is important for new investors. More experienced ones may not need that and consider it not worth paying hundreds of pounds more just to have a nice website.

When there are so many UK banks available it seems a bit daft to go overseas to avoid them and pay more to do so unless you have some very specific requirements UK banks don't offer.

Rollinghome

Ryan_Futuristics wrote: »

The speed of HL today (avoiding the monthly savings dates) has become phenomenal - very often same-day funds dealt and settled,

You still seem to be struggling to understand what "settlement" means.

Because you see the value of a fund you've sold "available for investment" that doesn't mean settlement has occurred. The time taken for settlement is dependent on the fund group, not on the intermediary.

Until recently that would be T+4 but following the adoption of the Central Securities Depositaries Regulation (CSDR) last April, fund managers are in the process of moving to T+3. Those who have already moved to T+3 in the last couple of months include Invesco Perpetual, HSBC and Blackrock. Which fund group is it you think is settling in T+0? Just try withdrawing your money on the same day as a sale if you really think that.

As for cost, then you would need to be extremely gullible to believe that HL would be cheaper for an ISA except in a few very specific circumstances. For someone like yourself who is new to investing and still has a very small sum to worry about then the additional cost is less of an issue but if you should have a larger sum at some point that you wanted to invest in funds then you'd then be wise to then consider the alternatives and in the meantime keep aware of the unusually high charges HL demand for leaving them. Continuing to pay many hundreds or even thousands of pound extra every year solely because you like a website wouldn't make much financial sense

masonic

Ryan_Futuristics wrote: »

Ha, well if you're avoiding shares because you know CSD is expensive there, that's what we'd call sculpting the data ... And even in yours, the difference is 0.21% (wiped out by a similar discount on a fund HL are offering, or timing a single trade)

Well no, I'm not avoiding shares because of the platform, I'm avoiding them because of the value of the portfolio. They are expensive for that sized portfolio at both HL and CSD - they just happen to be even more expensive at CSD. But they are only cheaper at HL if you actually utilise the regular saving service to place buy orders at a time of HL's choosing. This makes it quite difficult to buy the dips, which I know you are an advocate of doing. If you are placing the full price trades at HL, then it is more expensive than CSD even for shares.

I specified 12 share trades/year, so it presumably can't be investing twice a month at £50/each ... £100/month into an investment trust, with 1.5% in fees, is quite acceptable ... plenty of 'cheap' trackers have similar bid-spreads

The 12 share trades/year is in addition to a the monthly trades. When you specify a monthly amount, the calculator assumes you are splitting it evenly between all of the holdings in that class of investment. So for the values you entered, you would get 2 x £1.50 AND 1 x £11.95 trading fees per month at HL vs 3 x £10 trading fees at CSD. This is all explained in the help on the comparison site.

On the subject of spreads, most OEICs (including tracker funds) have no spread, but IT's have spread in addition to the 1.5% trading fee you describe, so I have no idea what you are on about. IT's are also subject to stamp duty on DIY platforms, which OEICs are not. All of this makes it much more expensive for the low value investor to use IT's or ETFs - a point that you have made several times elsewhere, but now seem to be trying to say the opposite!

See, not being able to invest in ITs, ETFs or shares cheaply would seem like a shortfall to me ... ITs tend to make very good core holdings ... UK equity ITs have consistently outperformed, while there simply aren't unit trust equivalents of global funds like Murray International or The Scottish Mortgage Investment Trust

I agreed with your sentiment when you said:

Ryan_Futuristics wrote: »

Yeah, I'd consider ETFs either for lump-summing and staying long (which is what I basically do with Investment Trusts), or when you've got a fairly large portfolio, where a £10 dealing charge isn't going to knock off more than 0.1% value

For a £1.50 charge to knock less than 0.1% off the value, you'd need to invest at least £1,500 into each fund per month (or keep changing your regular saving mandate with HL each month , alternating between funds, or turning it on and off). This is simply not feasible in a portfolio for which it has taken quite some time to build up as far as £1,100 in value.

But aside from this, the OP has no intention of investing monthly into ITs, so your earlier implication that HL is cheaper than CSD in this instance on the basis of investing into ITs is rubbish.

masonic

Thinking about it some more, I suppose we are both skating around the optimal solution in the hypothetical situation where someone really does want to hold funds and also some ITs in a low value portfolio - which is to invest in the ITs unwrapped at HL, while holding the funds at CSD. But it might be even cheaper to ditch HL and go for a flat £5-6 trading fee such as is offered by the likes of SVS or X-O.

krish123

masonic wrote: »

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.

fair enough, i guess its a case of keeping an eye on the fund, see how it does over a year or 2 and then anaylse the current situation.

Iv opted to drip feed into this fund, only a small amount per month.

I guess the challenge is when as you mention there is a big drop in captial, do you stick and hold of sell.

also is it worth using a strategy where you hold a fund for a few years take whatever profit it has made you and transfer into another fund you believe has better prospects at the time?

I say this as lets say what you guys say happens within 2 years and US shares fall and capital growth begins to fall. Would it not be sensible to move your money out and invest elsewhere?

Then again iv heard sometimes you have to ride out the bad times and hope things will regain in value.

Also its worth noting my time horizon is fairly long im only 23 (started investing at 22) and have a time horizon potentially for 30 or more years.

Im looking to buy Tim Hales Smarter investing too in order to gain more fundamental knowledge of investing and how to plan out a portfolio more efectively.

masonic

krish123 wrote: »

I guess the challenge is when as you mention there is a big drop in captial, do you stick and hold of sell.

Perversely, the best option could be to buy more.

also is it worth using a strategy where you hold a fund for a few years take whatever profit it has made you and transfer into another fund you believe has better prospects at the time?

I say this as lets say what you guys say happens within 2 years and US shares fall and capital growth begins to fall. Would it not be sensible to move your money out and invest elsewhere?

I really don't think it's possible to know what will happen next if markets start to fall. By the time you are sure it's a sustained correction or crash it is often too late to avoid the worst of it. If you want to go down that road, then it is better to do so on the basis of valuation rather than short term trend. As that's Ryan's specialist subject, I'm sure he will only be too happy to elaborate on that.

Then again iv heard sometimes you have to ride out the bad times and hope things will regain in value.

Also its worth noting my time horizon is fairly long im only 23 (started investing at 22) and have a time horizon potentially for 30 or more years.

So, potentially you will be investing many times more money in the future than you have invested at present - a very good reason not to be put off by falls that might occur in the next few years. These will be your big opportunities to buy cheap.

Im looking to buy Tim Hales Smarter investing too in order to gain more fundamental knowledge of investing and how to plan out a portfolio more efectively.

I think it would be good for you to read that, because, amongst a lot of other useful information, you'll also learn about the mechanics of a diversified portfolio and how asset allocation and rebalancing can help you with some of your worries expressed above.

Ryan_Futuristics

Rollinghome wrote: »

You still seem to be struggling to understand what "settlement" means.

Because you see the value of a fund you've sold "available for investment" that doesn't mean settlement has occurred. The time taken for settlement is dependent on the fund group, not on the intermediary.

Until recently that would be T+4 but following the adoption of the Central Securities Depositaries Regulation (CSDR) last April, fund managers are in the process of moving to T+3. Those who have already moved to T+3 in the last couple of months include Invesco Perpetual, HSBC and Blackrock. Which fund group is it you think is settling in T+0? Just try withdrawing your money on the same day as a sale if you really think that.

As for cost, then you would need to be extremely gullible to believe that HL would be cheaper for an ISA except in a few very specific circumstances. For someone like yourself who is new to investing and still has a very small sum to worry about then the additional cost is less of an issue but if you should have a larger sum at some point that you wanted to invest in funds then you'd then be wise to then consider the alternatives and in the meantime keep aware of the unusually high charges HL demand for leaving them. Continuing to pay many hundreds or even thousands of pound extra every year solely because you like a website wouldn't make much financial sense

I could've certainly saved money not being with Barclays since leaving school, but again I value the safety of my capital (particularly knowing someone in the US whose online fund platform went bankrupt and still hasn't had any money back ... And I forget the name, but this was very much an equivalent III or CSD a few years ago)

I've not been with HL long, but the trades I'm doing now are fast, and the numbers add up ... HL's trades got much quicker recently - and I can only speculate they now hold buffer sums in many of their funds, which enables them to do a virtual trade for a client to smooth over whatever delay there is in settling ... Otherwise they've implemented some other way of improving trading efficiency with fund managers

But then I also drive a car I could still sell for more money than you're ever likely to manage - it costs about £18k/year between insurance and services ... To me a trading platform's like a car ... It's getting me from one place to another, but quickly, and without unpleasant surprises, and I'll pay a premium for a nice ride on the way ... This neurosis to cut platform charges is evidently what led to the sea of despair I gasp at every time I open the III topic

TheTracker

Ryan_Futuristics wrote: »

I also drive a car I could still sell for more money than you're ever likely to manage - it costs about £18k/year between insurance and services ...

That's quite an expense for an unemployed person. Have you tried some of these MSE tips?

Rollinghome

Ryan_Futuristics wrote: »

I could've certainly saved money not being with Barclays since leaving school, but again I value the safety of my capital (particularly knowing someone in the US whose online fund platform went bankrupt and still hasn't had any money back ... And I forget the name, but this was very much an equivalent III or CSD a few years ago)

Charles Stanley are one of the oldest firms in the UK, dating back to the 18th century; I had an account with them as a discretionary client 40 years or so ago. They aren't new kids on the block like HL and II so what does "the equivalent of III or CSD" mean, if anything? Are you getting muddled again?

Ryan_Futuristics wrote: »

HL's trades got much quicker recently - and I can only speculate they now hold buffer sums in many of their funds, which enables them to do a virtual trade for a client to smooth over whatever delay there is in settling ... Otherwise they've implemented some other way of improving trading efficiency with fund managers

It's already been explained to you why trades will be a bit quicker than they used to be: the gradual move by fund managers from T+4 to T+3. I use several platforms including HL and the effect is the same on all of them. You still seem unable to grasp what settlement means.

Ryan_Futuristics wrote: »

But then I also drive a car I could still sell for more money than you're ever likely to manage - it costs about £18k/year between insurance and services

I'm pleased to hear you own a motorcar. Perhaps you could even think of getting yourself a decent house when you get a job instead of relying on your mum. I don't know how much you think I manage but it's somewhat more than the value of any car you or anyone else is likely to own. (I also own several cars as investments so perhaps we should compare notes?)

Ryan_Futuristics wrote: »

This neurosis to cut platform charges is evidently what led to the sea of despair I gasp at every time I open the III topic

For someone like you playing with just a few quid it must seem very odd to even consider fees. For you, having a nice website where you can muck around moving your bit of money around every other day or so may be important - much like another computer game. When you start investing seriously and needing to look after a really significant sum then the effect of costs becomes a major consideration. I've never had an account with II because I checked them out way back and wasn't overly impressed, although like you I have no direct experience of them, but I have had an account with HL for many years, from the time long ago when they were the cheapest around for funds. Now that account is for much less than 10% of my investments but they did agree to reduce their fees to 0.25% rather than the 0.45% I assume you're paying. And in all those years I have never had, nor expected, settlement through them in other than the normal time.

Hope you are able to find a job eventually where you can put your talents to good use and perhaps earn some proper money to invest, though I suspect you might want to spend less time fantasising about investing when you have something else to occupy you. When "investing" becomes an obsession then you're probably doing it wrong.

crystal_pixie_2

jimjames wrote: »

When there are so many UK banks available it seems a bit daft to go overseas to avoid them and pay more to do so unless you have some very specific requirements UK banks don't offer.

I hear what you are saying about and yes I think I do have a very specific requirement that none of the UK high street banks provide.

1. A good local service where I can go and see the same person at my local branch and I can ring him whenever I have a question. He knows my account and my circumstances.

2. Any mortgage requests are based upon your actual circumstances and not what is on an arbitary file.

3. Older style - bank manager decision banking where loyalty is rewarded.


Sorry for high-jacking the thread, I will get off my soap box now.