Basic Vanguard/Platform advice please

James888

I'm about to take the plunge and make my first investment.

I have 10K that I intend to invest in Vanguard LS80. This would be made up of one trade of 5K now and another in April when my ISA allowance renews. I don't intend on making regular monthly payments (albeit I'm open to any advice) I just want something to leave and forget about, within reason for the next 10+ years at least.

In terms of choosing a platform to use I'm finding it a little confusing. Having used comparefundsplatform.com it suggests that x-o.co.uk would be the cheapest due to the low annual cost and presumably because I don't want to make in excess of 2 trades. Am I overlooking anything? Any advice is greatly appreciated

Linton

As far as I can see x-o only deals in shares, not funds. That's what http://www.comparefundplatforms.com/ says and their website doesnt mention funds.

ColdIron

You've entered you details in the wrong place

Select whether you wish to hold FUNDS -Answer Yes
Select whether you wish to hold SHARES - Answer No

James888

That would help wouldn't it. Thankyou!

Any advice in relation to the fund itself? I'm aware it has no property exposure but seems pretty diversified. Did consider 5K in Vanguard and then perhaps 5K in another similar fund but seems Vanguard is the 'go to' for what I'm looking to do.

forextc

Hi James888.

There's some interesting info here that you might want to take a look at http://www.kroijer.com/ as the suggestion is that you can use simply two funds (a world tracker and a gilt fund) to create a good long term portfolio. If you follow this route you would also probably be able to shave a bit off of the ongoing costs for little extra work but this would be marginal - the Vanguard fund you suggest is already very competitive.

You will end up going round in circles with the various arguments for diversification, asset classes, active versus passive etc. The truth is that no none is able to know what will happen next year, let alone 10, 20 years into the future.

Some of the best advocates of portfolio advice have periods where they change their mind and adjust their splits. However the important take from this is that it always done retrospectively i.e. after events have played out.

So there is no right or wrong, just a best guess. Even risk can only be determined by what is known not what will happen. I personally like the simplicity of the approach suggested in the link provided. The Vanguard funds offer a similar type investment just bundled in a single package. They will suit most people who just want to make the least wrong decisions and get on with their lives.

The only thing neither approach includes is a property or gold element. Whether or not that would enhance or drag on returns over time will remain to be seen. However it does give a bit more diversification.

PaulC5

I have a regular Direct Debit each month buying Vanguard LS80. I see it as a top up for my pension in my later years.

I use Charles Stanley Direct ISA platform for Vanguard investment and had no troubles over the past 18 months and seems to be fairly cheap.

I also use an X-O ISA for my shares, I just have to manage my contributions as you can only pay into one per tax year.

Frufru23

i use Charles Stanley too and have found their service to be impeccable, as well as fairly competitive. I have a Sipp, S&S ISA and two JISA's with them. Their website is easy to use.. they also now have an app. I've used customer service both via email and telephone and found them to be very quick, courteous and polite.

Most of my investment is also in VS80.

I'd consider making regular payments as appose to just single one off's - this way you're going to be investing amounts at different times and spreading it out a little (buying the fund at different price points).

James888

Thankyou for the replies and the interesting link. I appreciate with these things there is no perfect answer or necessarily 100% right way of doing things.

Having used the comparison website Halifax currently comes out the cheapest albeit this wouldn't be the only deciding factor. I think I might have overlooked something though.

In regards to whether I open a Stocks and Shares ISA account versus just a normal trading account the later would seem to make better sense would it not? The overall annual cost would be lower than the ISA and as I'm not going to come anywhere near my Capital Gains Allowence (£11,100) the ISA offers me no extra tax protection. I guess as the holding increases in value over the years I may eventually need to sell my position and then effectively transfer it to an S&SISA where I would again invest in the same fashion but other than this there appears to be no other disadvantages.

ColdIron

You may not be liable for CGT now but you should aspire to it. Regardless, in an unwrapped account you still need to keep detailed records of all purchases, sales, equalisation payments, dividends etc to satisfy any query HMRC may have. None of this is needed within an ISA

ISAs also shield you from Dividend Tax on any distributions from your VLS80. You may have opted for the accumulation version but you still benefit from them so they must be recorded and accounted for. Many people opt for the Income version and reinvest themselves just to simplify the accounting process. None of this is needed within an ISA

£12.50 pa is peanuts and an ISA is a no brainer for most people if only for the peace of mind it brings

BLB53

Any advice in relation to the fund itself?

I like the simplicity of the all-in-one option offered by VLS, particularly the auto rebalance feature which maintains the fund at the level you require. I chose the VLS60 as I am retired and do not need too much volatility - it is up around 15% this year mainly due to the fall in sterling.

The VLS funds now have a 5 yr track record which can be compared to other similar funds. Heres a link to an article on diy investor which looked at the returns to last June from which you can see they are all doing very well
http://diyinvestoruk.blogspot.co.uk/2016/07/vanguard-lifestrategy-5-years.html

I hold my funds with Halifax as it is the cheapest at £12.50 p.a for a lump sum and I have it in my ISA.

James888

Thanks again for the replies. Think whether or not to use an ISA is a classic case of reading to much info on the subject. I had always intended to use an ISA and then you read something at the last hour and that makes you question yourself!

I'll have a last little think about whether to drip feed rather than make two relatively large investments then the time for procrastination is over!