S&S tracker

LittleDutchgirl

Hi there
I am ready to start drip feeding some money into an S&S ISA but some of the charges seem outrageous. Any suggestions for a novice? I have no debt, no mortgage, £40K in cash ISAs and high interest current accounts. Pension should be OK and job security is pretty good (teacher). No dependents apart from two cats. A tracker seems the way to go at least to start off with but don't want gains to be wiped out by management charges.
Thanks in advance
LDg

InvestInPoker

The charges are very low on trackers if you shop around. I recommend you read some articles about "vanguard lifestrategy".

Perhaps you mean the fund platform charges where you will be holding your purchase. These vary. Some are fixed fee, some charge a % of your portfolio. Which one is best for you depends on a lot of things. How big an investment are we talking? How much is something like customer service important to you?

I am also curious to know what fees you have seen that you consider outrageous.

Either way you are doing a sensible thing and you have come to the right place :money:

jimjames

LittleDutchgirl wrote: »

Hi there
I am ready to start drip feeding some money into an S&S ISA but some of the charges seem outrageous. Any suggestions for a novice? I have no debt, no mortgage, £40K in cash ISAs and high interest current accounts. Pension should be OK and job security is pretty good (teacher). No dependents apart from two cats. A tracker seems the way to go at least to start off with but don't want gains to be wiped out by management charges.
Thanks in advance
LDg

Can you give details of which S&S ISAs have outrageous charges? The one I use is 0.25% pa for the platform fee which seems reasonable to me until you have a portfolio in the hundreds of thousands.

Just don't make the mistake of thinking that a single UK FTSE 100 tracker is a balanced portfolio. You may also find it worthwhile moving more money into current accounts rather than your cash ISA unless you were planning on transferring the cash ISA to S&S.

LittleDutchgirl

This is definitely toe in the water. I finished paying off the mortgage earlier this year and having started a couple of regular saver accounts with decent rates I'd like to drip feed £500 a month into a tracker. I looked at my bank which seemed expensive. I realise I need to do some serious reading and start to get my head around this.
Thanks for the suggestions
LDg

jimjames

Definitely don't use banks for S&S ISAs, you'll be paying over the odds. Which bank was it?

If you read up on www.monevator.com then you may find some info to help.

colsten

jimjames wrote: »

Definitely don't use banks for S&S ISAs

Halifax can be ok, depending on the size of your investment. Not for a newbie investor though

OP. apart from the monevator link you have already been given: there's a comparison site that can help with your platform choice. It does not, however, help you with picking any fund(s) as this is an entirely different task. http://www.comparefundplatforms.com/

Superscrooge

Fidelity have a good range of low cost trackers which gives you the opportunity to choose which markets to track.

I agree with previous comments. As you build up your investment try to diversify across different markets rather than just FTSE100

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

MarkBargain

I use Charles Stanley Direct as a platform and pay into some of the top ethical funds (thinking of animal welfare, the environment, steering clear of investing in arms etc) listed on http://www.ethicalconsumer.org/buyersguides/money/ethicalinvestmentfunds.aspx The ones I bought have the same buying and selling prices for units, no up front charges, and annual fees under 1%.

jimjames

MarkBargain wrote: »

I use Charles Stanley Direct as a platform and pay into some of the top ethical funds (thinking of animal welfare, the environment, steering clear of investing in arms etc) listed on http://www.ethicalconsumer.org/buyersguides/money/ethicalinvestmentfunds.aspx The ones I bought have the same buying and selling prices for units, no up front charges, and annual fees under 1%.

Yet trackers have fees under 0.1%, over time that makes a massive difference.

Superscrooge wrote: »

Fidelity have a good range of low cost trackers which gives you the opportunity to choose which markets to track.

I agree with previous comments. As you build up your investment try to diversify across different markets rather than just FTSE100

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

If you are interested in Fidelity then it's cheaper to go via Cavendish which drops the fee to 0.25%. You can also get worldwide trackers which avoid you needing to diversify yourself with different funds.

MarkBargain

jimjames wrote: »

Yet trackers have fees under 0.1%, over time that makes a massive difference.

I hadn't realised the fees were quite so low on trackers.

On Charles Stanley Direct the L&G Tracker Trust tracks the all-shares index and that's only 0.1% a year fee as you wrote. The performance is up 26% over the last five years.

By comparison, the L&G Ethical Fund charges 0.31% fee, with performance being up 56% over the last five years. That's not to say it will always perform better of course, just depends how the shares do.

dunstonh

I'd like to drip feed £500 a month into a tracker.

That would be pretty poor quality investing. A single sector fund (whether tracker or active) is poor investing. You either need a multi-asset solution (which can be made up of passives or active of combination) or you need to build a portfolio of single sector funds. Not a single tracker.