Help needed on ISA stock/share

movilogo

I have never invested in Stock/share ISA before but now want to invest.

I have already invested £10k in this year's cash ISA. So I believe I have further £10k allowance which I can invest in stock ISA (with another provider). Is that correct?

I want to invest in Open Ended Investment Companies. I understand I have to do it via brokers like HL, III etc. But after that I have no clue

What are the steps for this? How do I select a fund?

badger09

movilogo wrote: »

I have never invested in Stock/share ISA before but now want to invest.

I have already invested £10k in this year's cash ISA. So I believe I have further £10k allowance which I can invest in stock ISA (with another provider). Is that correct?

I want to invest in Open Ended Investment Companies. I understand I have to do it via brokers like HL, III etc. But after that I have no clue

What are the steps for this? How do I select a fund?

Yes, you can invest up to £10k in a S&S ISA.

You could do worse than start here. Lots of useful info. Writer is biased towards passive investing, but IMHO that's no bad thing for a novice.

http://monevator.com/investing-for-beginners-why-do-we-invest/

movilogo

Once I select a fund, what would be total yearly charge?

Is it sum of platform charge, typically 0.45% for HL
+
OCF/TER typically 1.30-1.6%

Is there any other charges that I may incur?

AlanP_2

Some providers work on a percentage basis, such as HL at 0.45%, some work on a dealing fee so you pay for each Buy/Sell transaction.

Typically at <£25/30K a percentage basis is likely to work out best, there are various comparison tables / calculators on the the web - including one one on the monevator site to help you assess your options.

HL at 0.45% is at the top of the percentage platforms, most are around 0.25%. Some may charge an annual fixed-fee ISA Admin fee.

Assuming you go for OEICs on a percentage platform the only other cost would be the OCF/TER of the fund / funds you choose. These are paid implicitly by adjustments to unit prices as opposed to platform charges which are explicit and have to be funded either by cash or the platform automatically selling the required value of funds.

BLB53

Vanguard direct charge just 0.15% platform fee and if you select Their Lifestrategy fund which is v popular, a further 0.22% so just 0.37% total which works out at £3.70 for every £1,000 invested.

movilogo

Taking an example,

If I choose HL Ready Made ISA for regular balanced income,

http://www.hl.co.uk/investment-services/isa/ready-made-isa/portfolio-plus

It says net yield 3.2% (not guaranteed)
Platform charge 0.45%
OCF/TER 1.33%

So, if I invest £1000 then does it mean under ideal scenario, I would receive

£1000*(3.2 - 0.45 - 1.33)/100 = 14.6 at end of year?

badger09

movilogo wrote: »

Taking an example,

If I choose HL Ready Made ISA for regular balanced income,

http://www.hl.co.uk/investment-services/isa/ready-made-isa/portfolio-plus

It says net yield 3.2% (not guaranteed)
Platform charge 0.45%
OCF/TER 1.33%

So, if I invest £1000 then does it mean under ideal scenario, I would receive

£1000*(3.2 - 0.45 - 1.33)/100 = 14.6 at end of year?

No. A fund's yield is stated after fund charges (OCF/TER).

However, what you are looking at is an expensive method. There are far cheaper options for achieving a balanced portfolio. Some of which are outlined on Monevator.

movilogo

I am trying to use the tool on this page.
http://monevator.com/compare-the-brokers/

How do I input data?
ISA = ticked
£ = 10000

Investment details
Funds = 10000
Fund/trades/year = 2 [what is this?]
Shares = 0 [should it it be 0 for ISA S&S?]
Share trades/year = 0
Years to hold a/c for = 5 [just a random number]

Then it lists some brokers with annual cost and total cost.

Should I select one with lowest annual cost?

IanSt

movilogo wrote: »

Fund/trades/year = 2 [what is this?]
Shares = 0 [should it it be 0 for ISA S&S?]
Years to hold a/c for = 5 [just a random number]

I've not used this comparison tool recently but from a quick look:

Fund Trades/year - how many purchases/sells are you likely to do per year
Shares - yes put 0 if you are only holding funds
Years to hold - I think this could be important as some brokers will charge you for transfering/closing an account and so will bump up the average costs that the tool is calculating if you under estimate the number of years you would stay

movilogo wrote: »

Should I select one with lowest annual cost?

Well price is important but if this were a car would you just choose the cheapest car or would you choose the car which best suited your needs and your budget?

For instance do all the brokers actually have the fund(s) that you are thinking of buying and have you looked for any reviews of the brokers and their platforms?