Cheapest platform for holding investment trusts

adamcartney

I would like to buy into ITs within a ISA wrapper next tax year. I'll invest about 10-15k (rest will be in funds) within the first few months and reinvest all dividends.

Doing my own research, I think a % fee broker would be cheapest for me and, using monevator's broker comparison table, I've narrowed down the choice of platform to AJ BELL (no platform fees for ITs; £9.95 dealing fee; no special dividend reinvestment rate) and TD INVESTING (no platform fees for ITs; £12.50 dealing fee; dividend reinvestment at £1.50 if within FTSE 350). Some of my ITs will be outside the FTSE 350 so I'm a little worried about paying normal dealing fees to reinvest these.

Are there any better options?

TCA

What does "the rest will be in funds" mean? From a cost perspective you'd obviously have to pay for holding funds if holding them as well as investment trusts. TD Direct is free for holding investment trusts over £5,100 in value, but you'd pay their platform fee for any funds held.

JohnRo

Fwiw, I use CSD for IT's.

They have a charging structure that's a little odd but not complicated. Trade 6 times each 6 month charging period and the explicit platform fee is zero. Each trade costs a flat £10 which isn't the cheapest.

I'm actively rebalancing with new money approximately each quarter (and any accrued dividend cash held on account) so 6 trades every 6 months fits well with my scheduled purchase program using new money, which makes the cost £120 pa. or if I stopped trading and simply held these the cost is capped at £150 pa.

I know CSD aren't the cheapest but in my experience with several providers over the years they offer a superior platform, account portal and customer service.

My biggest gripe with them is that their otherwise excellent account data retrieval options don't cater for a premium/discount parameter for each IT held, which really would be icing on the cake for my spreadsheet entries.

adamcartney

Thanks.

I did look into CSD but as I envisaged paying in a lump sum (when the IT showed a discount or small premium) rather than making monthly contributions, the 6 chargeable trades requirement put me off. However, I suppose I could pay in quarterly plus reinvest cash dividends which would bump me up to 6 chargeable trades in 6 months. However, the £10 cost of dealing/reinvesting dividends puts me off. At least TD let you reinvest from £1.50, even if this is only for FTSE 350 companies.
I guess I'll just have to bite the bullet on this one.

As someone new to investing I keep reading that reinvesting dividends is the key to growing capital. It does seem odd then that so few fund shops offer a cheap way to reinvest.

TCA

adamcartney wrote: »

As someone new to investing I keep reading that reinvesting dividends is the key to growing capital. It does seem odd then that so few fund shops offer a cheap way to reinvest.

Very true. However sometimes it can be useful if you don't want to reinvest in the particular share that's paying the dividend. If you're rebalancing a portfolio, you may want to buy more of a different share and lump some different dividends together as part of it.

JohnRo

The whole cheap dividend reinvestment thing is a bit of a red herring for me, if, as I am, regularly rebalancing with new money then reinvesting the dividends at the same time costs me nothing extra and boosts the planned and scheduled regular purchases with new money by a significant amount (best so far has been +77%).

It boils down to how you're planning to invest.

EdGasket

x-o £5.95 per trade; no holding fees.

colsten

http://www.comparefundplatforms.com/

JohnRo

Comparefundplatforms doesn't appear to model the CSD 6/12 trades charging structure properly, it's a country mile off.

Totton

Not the cheapest but at a zero annual charge then I find Hargreaves Lansdown a good option for my IT holdings. Dealing cost is £11.95 unless you trade frequently. If held in an ISA then there is the annual ISA charge of £45.

Dividend reinvestment at HL is 1% (max £10) which may not be so good, that doesn't affect me as I allow my dividends to build up and make single purchases as an when.

Vortigern

adamcartney wrote: »

Are there any better options?

If you can manage without an ISA wrapper look for the IT managers' savings plans. For example you can buy any of Baillie Gifford's ITs with no fee other than Stamp Duty. You can also reinvest dividends @ stamp duty only.

They would charge a fee to hold the shares in an ISA, and also to sell your shares.