First time investing help - directly with the fund, or via 3rd party?

Rich99

dunstonh wrote: »

Also, using single sector funds is typically done with larger portfolios and not smaller ones. Mainly as its not really possible or cost effective to build a portfolio of single sector funds with small amounts. For example, if your model has 3% allocated to Japan, then with £10,000 that is just £300. At £100k, its £3000.

If you are building a portfolio then that involves management decisions. i.e. how much are you going to have in each sector. So, what knowledge do you have about building such a portfolio and why do you think you can do better than a fund manager? Would a multi-asset fund be better suited for your knowledge and/or investment amount?

Can you just clarify some of this for me? I don't have the time or expertise to do any kind of active management, or building complex portfolios etc. My reasoning with going for a tracker was that it's a fairly simple way of (hopefully) getting a return on investment. Are you saying that instead of looking at investing in 1 tracker, I should be looking at funds that invest in multiple trackers on my behalf? If that's the case, where can I find out & compare these funds?

aroominyork

A word in defense of HL. Because they charge on a percentage basis (0.45% pa) they are not expensive if you are investing a small amount. If you went with Interactive Investor (iii.co.uk) you would pay £90+VAT pa (and also pay a trading charge). So HL would be cheaper if investing less than £24,000.

If you are dipping a toe into the potentially tempestuous waters of investing, HL's functionality and service can be very useful. That is what I have found over the last six months; HL helped me grasp the mechanics of investing and now I understand them I will move to a cheaper platform.

elephantrosie

what is the different between this passive tracker and roboadviser tracker?

bostonerimus

Rich99 wrote: »

Can you just clarify some of this for me? I don't have the time or expertise to do any kind of active management, or building complex portfolios etc.

I'm the same. The good news is that you don't need to do those things

My reasoning with going for a tracker was that it's a fairly simple way of (hopefully) getting a return on investment. Are you saying that instead of looking at investing in 1 tracker, I should be looking at funds that invest in multiple trackers on my behalf? If that's the case, where can I find out & compare these funds?

Look for multi-asset funds that contain a number of trackers. An example would be the Vanguard Life Strategy range. These will give you a broadly diversified portfolio in a single fund.

bostonerimus

elephantrosie wrote: »

what is the different between this passive tracker and roboadviser tracker?

A passive tracker is a fund that just follows a predetermined index of investments. That can be anything really, FTSE100, Global equities, European Small Cap etc, A roboadvisor will produce a portfolio of various investments...they might be passive trackers....for you and will provide basic services like rebalancing the allocation when things go up or down in value. You can get the same thing by simply buying a multi-asset fund from someone like Blackrock, Vanguard, L&G etc. You pay for these services in higher fees than you'd pay for the individual trackers and doing the rebalancing yourself.

dunstonh

Can you just clarify some of this for me? I don't have the time or expertise to do any kind of active management, or building complex portfolios etc. My reasoning with going for a tracker was that it's a fairly simple way of (hopefully) getting a return on investment.

A tracker invests only in a certain area. If you got a European Equity tracker it would only cover European Equity. You would not get exposure to Asia Pacific, US etc. To get exposure to those areas, you would need more funds to cover all the different areas.

A single tracker covering a single region or area is bad investing.

You either need multiple trackers but then you need to decide how much goes into each one. That is a management decision. Or you should look at multi-asset funds. Those are the funds aimed at inexperienced investors.

If you prefer to build your own portfolio and put x% into different areas then you need to research the allocations and work to a model. The numbers should not be random (i.e. you shouldnt just pick x% out of thin air).

what is the different between this passive tracker and roboadviser tracker?

Roboadvisers are not a tracker. They may use passive underlying funds but they are closer to multi-asset as there is someone controlling the asset allocation that isnt you. Closer matches to robobadvice are L&GMI and VLS.

What's wrong specifically with L&G in comparison to Blackrock and Vanguard?

Nothing. For example, Blackrock (ishares class H) is better for European equity than Vanguard & L&G. However, for UK equity, L&G is better than Blackrock (class H and L), then Vanguard and HSBC. (Since Dec 09, L&G 103.89%, Blackrock 102.74 (class H), 101.88 (class L), Vanguard (101.26), HSBC 100.92%)

Differences are small but when you go with trackers, cost and tracking error are the issues.

atilla

bostonerimus wrote: »

If you are tracking something like FTSE100 the only distinguishing factor between different trackers should be cost, so choose the cheapest......and, yes I am biased to Vanguard, but they are not necessarily the best in the UK because of their currently limited offerings ie no SIPPs. and if you can find cheaper or better returning trackers then use those.

Fair enough.
I queried your comment siimply because some of the L&G options are very low cost, got a couple myself. Yes, they are in SIPP so that helps.

cloud_dog

There are some obvious, fairly critical questions that haven't been asked and which potentially have a bearing on the investment decisions, for example....

1. OP, how old are you?
2. What pension arrangements do you have

I'm a little unsure if for someone in the growth phase of their investment life (assumption) that they need to have a balanced asset investment?

Obviously, risk assessment of the individual notwithstanding.

Rich99

cloud_dog wrote: »

1. OP, how old are you?
2. What pension arrangements do you have

I'm a little unsure if for someone in the growth phase of their investment life (assumption) that they need to have a balanced asset investment?

Obviously, risk assessment of the individual notwithstanding.

No idea how this affects things, but I'm 40 years old, with a company pension (that like a lot of pensions, was great when I started working, not so much now!). Not planning on stopping putting into the pension, but recent downgrades in the benefit that my pension will give have led to me thinking a lot more seriously about putting some investments aside. My basic aim is to invest over the next 25 years, to supplement the pension.

bostonerimus

Rich99 wrote: »

No idea how this affects things, but I'm 40 years old, with a company pension (that like a lot of pensions, was great when I started working, not so much now!). Not planning on stopping putting into the pension, but recent downgrades in the benefit that my pension will give have led to me thinking a lot more seriously about putting some investments aside. My basic aim is to invest over the next 25 years, to supplement the pension.

I this a final salary pension? If so you are in a good position. The guaranteed income of a final salary pension and state pension plus having a nest egg in a SIPP or an ISA is a great combination.