Drip feeding DIY investment, where do I start

sliver

Hi. I want to start investing and want to drip feed monthly.
Where is a good place to start researching platform options please. I am looking at £3-500 per month for the next 2 years and then need to reassess the monthly amount. Is this viable?

I may not be able to use an ISA as I might not be resident in the UK for a while.

As background I have a small amount of shares and a healthy cash holding. I want to start off with a passive portfolio (Domestic ie ftse index tracker, Uk small capitl: Global ie pacific ex Japan and emerging markets make the initial allocation shortlist with the possibility of property and bond indexes later).
I am not averse to risk, and my timeframe for the investment is 10-15 years, notwithstanding that I can only commit to drip feed for 2 years with any certainty.

A friend has mentioned vanguard life strategy as a lazy option and I am just starting to look into that too.

Thanks

bowlhead99

sliver wrote: »

Hi. I want to start investing and want to drip feed monthly.
Where is a good place to start researching platform options please

There are a number of comparisons that often get mentioned here.

Try http://www.langcatfinancial.co.uk/white-paper/directplatformguide2016/

or

http://monevator.com/compare-uk-cheapest-online-brokers/

I am looking at £3-500 per month for the next 2 years and then need to reassess the monthly amount. Is this viable?

Yes. As the total amount is only going to be 7-12k the simplest thing to do is stick it in a single, multi-asset, fund that you add to each month.

If you want to invest a lot more time than is warranted by the value being invested, you could research ten specialist funds for individual sectors and then put £30-50 a month into each of them; you would have to juggle them around a lot as for example your preferred allocation might call for 5% in one sector and that is only £15pm out of the £300 and platforms will not efficiently take incremental investments of £15pm. At that level of investing it is simpler to just stick it all in one fund and let the fund manager deal with it.

The 'lazy option' of an internationally-investing multi-asset fund (there are a variety of managers that offer such funds with different levels of management) seems fine unless you have a particular issue with investing in all the areas that the professionals who built the portfolio held by the fund think their customers would sensibly want to invest in.

For example, you say "Global ie pacific ex Japan and emerging markets". But that is a strange definition of "Global", as it would be less than 15% of the global market. UK is well under 10% of the global market. Developed pacific ex Japan is smaller than Japan, both are smaller than Europe, both are a lot smaller than US. A competent fund manager is not going to ignore those other global markets, so if you want to, you will have to build something yourself from scratch.

I may not be able to use an ISA as I might not be resident in the UK for a while.

On £7-12k invested and only a small amount of other shares, you are a long way from needing the protection of an ISA wrapper for dividend tax and capital gains tax but you might get there on the capital gains side over your 10-15yr timescale if you didn't do any selling or rebalancing along the way. Even if no tax is going to be due, an ISA is useful generally to save you needing to keep records to show that no tax is due. Although it will not help with foreign taxes as the country in which you're resident will probably not recognise the ISA wrapper. Depending where you go, overseas investment income and gains may or may not be taxable.

You can't subscribe to an ISA when non resident but you can use your full annual allowance in the year you leave (if you do it before you leave) and the year you come back (once you're back). While overseas you can continue to pay into non-ISA accounts if you are using a provider that is willing to take money from existing customers who are not UK resident (some/many will not offer new accounts to non-UK residents).

BLB53

A friend has mentioned vanguard life strategy as a lazy option and I am just starting to look into that too.

I like the VLS option and now hold a significant holding of the 60% equity version in my ISA. I have seen a good return this year, much as a result in the fall of sterling post Brexit but ~18% year to date.

Of course, if the £ recovers next year it may well create some headwind for the VLS funds but if you are drip feeding, it should not have as much impact compared to investing a lump sum now.

The VLS funds have been running for just over 5 yrs so you can compare performance against other multi asset funds. Here a link to an article on the diy investor site which seems to indicate they are all doing well so far
http://diyinvestoruk.blogspot.co.uk/2016/07/vanguard-lifestrategy-5-years.html

So far as platforms, you are probably better off with a percentage based option which does not charge transaction fees for your monthly fund purchases e.g. Charles Stanley Direct.

sliver

Thank you. Somethings to be getting on with looking into