Tracker?

Spurs_2015

I am totally new to investing in anything other than an ISA and would like to start off sensibly, while its an attractive option to pick some shares myself I don't have either enough money or the experience. I have been looking into trackers and I like the look of the one which tracks the S&P 500, do you think this is a good option for a beginner with a limited amount of start up funds (£800) but which I can drip feed some each month into?

Silian

Why not go with a global tracker instead? Something like the Vanguard Lifestrategy fund will diversify for you - no effort needed.

dunstonh

I have been looking into trackers and I like the look of the one which tracks the S&P 500, do you think this is a good option for a beginner with a limited amount of start up funds (£800) but which I can drip feed some each month into?

No. Its poor quality investing as it is single sector. It is high risk (40% loss potential in 12 months) and way above the typical tolerance of a new investor and £800 would suggest you dont have much to spare.

Multi-asset solutions are a better option for smaller values.

Spurs_2015

Thanks, I assume the Fidelity Index World Fund is something I Should be looking into then for diversification?

delmar39

You mention the Fidelity Index World Fund have a look at their range of trackers to compare charges. Why not start with their (or other provider) lowest charge tracker and add more as you go to spread the risk. Then look at other options when you have your foot on the ladder so to speak.


Fidelity are changing the way they charge from December 2015 so important to look at this.

https://www.fidelity.co.uk/investor/tracker-funds/our-range.page

fun4everyone

delmar39 wrote: »

Fidelity are changing the way they charge from December 2015

What are they changing exactly? I had a look at the link and specifically the "charges" tab but could see nothing about forthcoming changes.

Aretnap

fun4everyone wrote: »

What are they changing exactly? I had a look at the link and specifically the "charges" tab but could see nothing about forthcoming changes.

IIRC rather than just charging a flat 0.35% pa, they're introducing a minimum charge of £45. This will make them more expensive for people with relatively small portfolios, and very expensive indeed for someone with £800 to invest.

chockydavid1983

I assume this will also apply to Cavendish online, who use Fidelity? That would be annoying as I've literally just started to drip feed so would probably have to switch platform :-/.

Chris.

KDH_2

AFAIK -£45 charge will not apply to Fidelity via Cavendish Online .

Cavendish platform charges are 0.25% in total rather than Fidelity's 0.35%
(For very large portfolios Fidelity drops to 0.2% making the direct route cheaper)
http://www.cavendishonline.co.uk/investments/our-service/

chockydavid1983

That's true, thanks KDH, I forgot that Cavendish wasn't also 0.35%. Hopefully it will stay at 0.25% for now.

delmar39

fun4everyone wrote: »

What are they changing exactly? I had a look at the link and specifically the "charges" tab but could see nothing about forthcoming changes.

This has been covered by others, but being as though you asked here you go:

Service fee

This covers the costs of everything the administrator of your investments offers you. At Fidelity, the service fee is typically at 0.35% of the value of your holdings (or less if you have more invested with us). This fee reduces to 0.20% if you have £250,000 or more with Fidelity Personal Investing. In addition, we won't charge an annual service fee on any assets above the level of £1,000,000.

From December 2015, the service fee will be a flat rate charge of no more than £45 (and £25 for Junior ISA or Junior SIPP), if the value of your portfolio is less than £7,500.For full details please refer to our Doing business with Fidelity document.