Vanguard Fund - Questions

TheBunting

Hi guys,

I have been looking into the Vanguard funds and would like to do the Lifestretegy 80 Fund. Firstly, where is best to go to open up an ISA for this fund? Secondly, I already have a SL S&S ISA, do I need to cancel that first? Thirdly, how do I go about cancelling my SL and getting the funds into my Vanguard fund?

Is it worth the hassle to switch to this fund? It's more risky but age is on my side so have plenty of time for it to grow.

Any feedback appreciated, thanks.

AlanP_2

Have a look at http://www.comparefundplatforms.com/home, on Monevator and see if you can find Snowman's spreadsheet that is referenced on here to help calculate the cheapest platform.

For me with a tracker based ISA with monthly drip feeding Cavendish seemed to be the most cost effective but it does depend on sums involved (%'age based charging structures cheaper for smaller funds, fixed / transaction priced better for for larger sums typically).

I haven't done a transfer but my understanding is that if current and new platform offer the same funds then you can do a straight in-specie transfer where the receiving platform asks current platform to send them across (NOTE: some providers charge for outgoing transfers I think so check SL details).

If funds are not the same on both either sell SL funds and buy a fund(s) that are offered by both and then do transfer OR sell, do cash transfer and buy new funds once on your chosen platform. Disadvantage is that you would be "out of the market" for a period of time and prices may move against you, equally they could move in your favour.

When you say more risky, what do you mean?

The VLS80 is a diversified option that spreads investments across a range of geographic sectors and indexes plus it has a 20% Bond element that traditionally hedges against fluctuations in equity prices although there is a lot of discussion at the moment about whether this remains true today given low interest rates and high bond prices.

What is the SL ISA invested in as someone may have views on the relative risks compared to VLS80?

At age 22, and if you are investing for the longer term (10+, maybe 20 or 30 or 40 years) you have plenty of time for prices to recover even if there were a number of dips along the way compared to someone like me in their mid-50s.

jimjames

TheBunting wrote: »

Is it worth the hassle to switch to this fund? It's more risky but age is on my side so have plenty of time for it to grow.

Any feedback appreciated, thanks.

You haven't given us any information as to why it is more risky as that entirely depends on what is in your SL ISA.

You can't cancel an ISA as such, you'd have to either close it or transfer it. Closing would lose your allowance for this year and transferring would keep the allowance. Only issue is that so close to the end of the tax year you are unlikely to have the transfer completed in time to add new money from this year's allowance to the ISA once it reaches the destination. Way round that would be to pay in cash to the SL ISA if you want to add more than £15k. If not you can just wait until it has transferred and use next year's allowance.

TheBunting

Thanks for the feedback guys.

I meant riskier as in the 80 Fund has a lot more ups and downs than say the 40 or 60. I also compared it with the SL portfolio I currently invest in and does perform better (especially over long periods of time). And like I said, I am in it for the long haul so moving to this better performing fund at the start could make a massive difference say 15-20 years down the line.

So my best option is to open up the Vanguard Fund on a platform and arrange to have my SL money transferred to it? Will this then close my SL account? Am I allowed to have two separate S&S ISAs open at the same time?

enthusiasticsaver

You cannot open two stocks and shares isas in the same tax year so you would need to transfer your existing SL one to the Vanguard either through your existing platform or do as Alan suggests and an in specie transfer. There is however nothing to stop you having two stocks and shares isas per se as long as they weren't both opened and invested in the same tax year.


I am with Cavendish who are cost competitive for smaller portfolios as I have just started investing. Check the compare platforms link on monevator for your particular circumstances.


I am not sure what to tell you re the risk factor as obviously the Vanguard 80 is riskier than my risk profile but as you are in for the long haul and a lot younger than me ( I am mid 50s) then that should not really matter so long as you understand these risks. What does your existing SL isa invest in? You could always open the Vanguard one in the new tax year (after 6 April) and then transfer the SL across if that was easier.

badger09

enthusiasticsaver wrote: »

You cannot open two stocks and shares isas in the same tax year so you would need to transfer your existing SL one to the Vanguard either through your existing platform or do as Alan suggests and an in specie transfer. There is however nothing to stop you having two stocks and shares isas per se as long as they weren't both opened and invested in the same tax year.


I am with Cavendish who are cost competitive for smaller portfolios as I have just started investing. Check the compare platforms link on monevator for your particular circumstances.


I am not sure what to tell you re the risk factor as obviously the Vanguard 80 is riskier than my risk profile but as you are in for the long haul and a lot younger than me ( I am mid 50s) then that should not really matter so long as you understand these risks. What does your existing SL isa invest in? You could always open the Vanguard one in the new tax year (after 6 April) and then transfer the SL across if that was easier.

Like cash ISAs, you can open as many as you want, but can only pay new money into one (of each type cash and S&S) at a time.

dunroving

TheBunting wrote: »

Hi guys,

I have been looking into the Vanguard funds and would like to do the Lifestretegy 80 Fund. Firstly, where is best to go to open up an ISA for this fund? Secondly, I already have a SL S&S ISA, do I need to cancel that first? Thirdly, how do I go about cancelling my SL and getting the funds into my Vanguard fund?

Is it worth the hassle to switch to this fund? It's more risky but age is on my side so have plenty of time for it to grow.

Any feedback appreciated, thanks.

Did you *open* the SL ISA this tax year, or previously? I think some of the statements people are making about not opening two ISAs in the same year are assuming you opened the SL one this year. As far as I know, you can have two S&S in the same year, you just can't have two new S&S ISAs in the same year.


If your SL ISA was opened in a previous tax year, my understanding is that you can open a new ISA with a new provider now, pay into it now, and transfer your SL ISA whenever you want.

Archi_Bald

dunroving wrote: »

Did you *open* the SL ISA this tax year, or previously?

As badger09 said, you can open as many as you like each year. The restrictions are on depositing money.

dunroving

Archi_Bald wrote: »

As badger09 said, you can open as many as you like each year. The restrictions are on depositing money.

Why would you open an ISA and put nothing in it? Seems like an odd thing to do.

Mrbeethoven

dunroving wrote: »

Why would you open an ISA and put nothing in it? Seems like an odd thing to do.

I just opened a 2nd S&S ISA in 2014/15 because I want to use it from 6/4/15 and opening it now means the opening fee is £25 rather than £200 from 16/3/15 (iWeb). As long as I put no money in until 6/4/15 there's no problem.

Eco_Miser

dunroving wrote: »

Why would you open an ISA and put nothing in it? Seems like an odd thing to do.

You can put something into an ISA without depositing money - you transfer from an existing ISA, which is allowed at any time and with any amount, subject to keeping the current year's contributions together.