S+S ISA for Beginner Investor

edited 16 June 2017 at 10:48AM in ISAs & Tax-free Savings
7 replies 2.6K views
cynicaldoccynicaldoc Forumite
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edited 16 June 2017 at 10:48AM in ISAs & Tax-free Savings
Dear all

New to the forum but I have done a lot of reading herein and around various open-source/free DIY investing websites, as well as speaking to various colleagues who do this regularly with larger sums.

I realise that the amounts are low at the moment, but you have to start somewhere yes? I'm 30 years old and aiming to keep this ISA for 25-30 years to grow a retirement pot.

Whilst I am new to the whole investment scene, I have found the last seven months of reading and investing absolutely fascinating.

Below is my modest start. I would be interested to hear the opinions of my more learned forumers! (Sorry I've tried to post a screenshot unsuccessfully)

Blackrock UK Equity Tracker £529.29 +£20.93 + 4.12%
CF Woodford Equity Income £439.85 +18.70 +£4.44%
Jupiter India £335.07 +£22.96 +7.36%
L+G International Index Trust £425.64 +£23.00 + 5.71%
Scottish Mortgage Investment Trust £307.62 +£1.07 +0.35%
(currently ex-div; pending div payment)
SXX £116.59 +16.62 +16.62%
Vanguard LS 80% Equity £441.37 Evens (bought yesterday)

Stock value £2,586.99
Total value £2,595.97 (+£94.16 +3.78%)

Over seven months thus far. My feedback request is:

Sensible funds?
Decent diversification?
Any suggestions of what I may have missed?

My aims are sensible growth within modest risk over a long timescale rather than short term gains. Currently £100/mth DD plus anything else stuck in if I have spare capital at the end of the month. I hope this will increase as my salary increases.

Replies

  • dunstonhdunstonh Forumite
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    My feedback request is:

    Sensible funds?
    Decent diversification?
    Any suggestions of what I may have missed?

    You are mixing multi-asset and single sector funds. Why? (not necessarily a bad thing but there has to be some logic to it). Is the asset allocation a bit random or are you following a model?

    You say moderate risk but that spread is a lot higher than what most people would use the word moderate to describe.

    Finally, why try and build a bespoke portfolio with such as small amount? It's largely pointless. Especially when you are using investments with dealing charges.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • I'm not following a model but I am trying to apply some logic following reading materials

    Index trackers often beat actively managed funds, but Woodford plus Jupiter India have good feedback and India in particular offers potentially big growth?

    SXX is a local investment which has significant potential over the long-term according to reading. This is my only single stock pick as I feel Id on't know enough to pick stocks personally.

    SMT is very highly regarded so I thought that was sensible albeit moderate-higher risk but over a 20-year time scale this would hopefully balance out.

    Vanguard -> good exposure to multiple indices and some bond exposure.

    My overriding comment here would be I am new, green and open to advice and feedback. Hence the post. I did consider putting 50% in UK equity tracker and 50% in L+G US tracker but then played around with other things. Probably a bit much in hindsight...

    I am hoping that within the next five years I will be able to increase ISA contributions to close to £10k pa
  • edited 16 June 2017 at 8:55PM
    cynicaldoccynicaldoc Forumite
    26 Posts
    edited 16 June 2017 at 8:55PM
    I have spent time reflecting and reading and reading some more.

    You're right. I'm wasting time and energy and most importantly money on charges investing in so many little things via HL.

    I am now seriously considering selling all my funds/stocks and transferring the cash pot to Vanguard directly. Admit I've probably made a mistake here and with only £2500 I'm better off all in the VG LS 80 for a decade and only pay 0.22% to Vanguard and avoid the HL 0.45%.

    Or slim down my funds into HSBC FTSE World Index fund in HL.

    I suppose if this was easy everyone would be a millionaire.

    Thoughts?
  • MobeerMobeer Forumite
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    If you can keep this fund un-cashed until you retire then a Lifetime ISA is worth considering. They have big penalties for cash withdrawals but a 25% bonus on money paid in.
  • badger09badger09 Forumite
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    cynicaldoc wrote: »
    I have spent time reflecting and reading and reading some more.

    You're right. I'm wasting time and energy and most importantly money on charges investing in so many little things via HL.

    I am now seriously considering selling all my funds/stocks and transferring the cash pot to Vanguard directly. Admit I've probably made a mistake here and with only £2500 I'm better off all in the VG LS 80 for a decade and only pay 0.22% to Vanguard and avoid the HL 0.45%.

    Or slim down my funds into HSBC FTSE World Index fund in HL.

    I suppose if this was easy everyone would be a millionaire.

    Thoughts?

    If you intend to hold only Vanguard funds, then a move from HL to Vanguard's new platform will save you money.

    However, you are misunderstanding the charges. There is a 0.22% annual charge on the VLS fund, wherever you hold it, but in addition, there is a platform charge of 0.15% (compared to HL's 0.45%) so your saving in the first year would be only £7.50. Don't forget HL's fees for transferring out & closing your account.
  • edited 19 June 2017 at 7:11PM
    cynicaldoccynicaldoc Forumite
    26 Posts
    edited 19 June 2017 at 7:11PM
    Thanks.

    I have decided to stick with HL for now. As you say, the fees to transfer are larger than the overall cost of my (currently) meagre portfolio. I have also streamlined a little based on feedback herein/reading other threads to aim for long-term growth at minimal admin fees.

    I am still however tempted to just split my money between 50% VG LS 80% and 50% RIT plc but I am trying my hardest to not meddle too much and just leave stuff to hopefully grow.
  • edited 20 June 2017 at 4:48AM
    bowlhead99bowlhead99 Forumite
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    edited 20 June 2017 at 4:48AM
    cynicaldoc wrote: »

    I am still however tempted to just split my money between 50% VG LS 80% and 50% RIT plc but I am trying my hardest to not meddle too much and just leave stuff to hopefully grow.

    Vanguard LS and RIT have very different approaches and asset allocations. Vanguard aim to deliver the return of the indexes they follow. RIT aim to deliver long term capital growth while preserving capital: "healthy participation in up markets with reasonable protection in down markets", without a formal benchmark. It is a decent mixed bag of diversification but will likely give you quite a different result to a world index. I have RIT within my pension.

    If you were going to give RIT your money, to allocate a chunk of your wealth into investing the way they want to through direct public and private investments and funds, it could be quite a challenge for you to try and use a bunch more funds to try to balance every sector. Given they may change tack on their own conviction it would be a largely impossible task and if you did somehow balance lots of other funds around them to get yourself an even allocation around the world's equity and debt markets, you would be defeating the point of what they are trying to achieve.

    As you will have seen, transaction fees with HL for investment trusts are high if you don't use their "regular investing" service to drip monthly into just one trust and/or you aren't investing much per transaction. So, that would hamper your returns. If you only have £50 per month spare for RIT you are going to be paying a high proportion of your £50 as a transaction fee when you deploy it and buy your three or four shares each time. £2 transaction fee on each £50 is 4%, a tough hurdle to overcome with performance. If you're ok with the risk level of VLS80 from day to day, perhaps better to just buy some of your chosen investment trust once a year or so having built up the money in the VLS fund from month to month without transaction fees.
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