New to investing

AlanP_2

heytoki wrote: »

ok- Got it now

Regarding the platform, i had considered first Charles Stanley to open the ISA Stock and Shares. As per your comments Vanguard is cheaper but i have seen that Vanguard has only its own funds. Could this be a limitation?

That depends on what you wnat in your portfolio.

Start with your objective, then what asset allocation you want, then funds to deliver allocation, and finally "where can I buy them?" -the platform decision.

If Vanguard can provide what you need then their platform is very cost effective, if it can't it is no use to you whatsoever.

Cash-Strapped.T32

Using the Vanguard platform does appear cheaper than many others (assuming you're content with Vanguard funds), but it means a £100 min monthly payment, though, does it not?

They don't make it very clear, but that's how it reads looking at their website.
Fine for most people, but for someone who just wanted a small investment, possibly contributing on an ad-hoc basis this sounds like it might not work so well.

Curos

Cash-strapped is correct that in order to invest via the Vanguard Investor platform there's a minimum £500 initial investment or £100 regular monthly payment that applies to each fund across the platform.

I'd also note that with Exchange Traded Funds, if the share price when you make a payment is higher than your payment, then you will not actually invest in the fund and cash will sit in your account until there is a sufficient amount to purchase a share (or shares).

heytoki

Cash-Strapped.T32 wrote: »

Using the Vanguard platform does appear cheaper than many others (assuming you're content with Vanguard funds), but it means a £100 min monthly payment, though, does it not?

They don't make it very clear, but that's how it reads looking at their website.
Fine for most people, but for someone who just wanted a small investment, possibly contributing on an ad-hoc basis this sounds like it might not work so well.

What happens if you don't pay the £100? did you get a penalty fee?

dunstonh

heytoki wrote: »

What happens if you don't pay the £100? did you get a penalty fee?

If you have obtained a minimum investment value, then nothing will happen. If you stop it below their minimum investment value, nothing will happen for a while. However, they have the right to close the account. Other platforms have similar and its hit and miss to how often they actually check.

heytoki

Finally i have opened an ISA Stock and Shares account with Vanguard and put £500 into the Life Strategy 40% equity fund and i will be topping up gradually.
Thank you everybody for your comments. It has been very helpful.

chockydavid1983

Interesting re: Transaction costs- that makes quite a big difference to VLS.

bowlhead99

chockydavid1983 wrote: »

Interesting re: Transaction costs- that makes quite a big difference to VLS.

It doesn't really. Transaction costs have always existed and are always included in net returns to the investor. As what is spent on the costs of transactions, no longer exists as asset value ,net, to give back to the investor. The fact they are being disclosed using a particular measurement or estimation technique when previously they weren't disclosed at all, doesn't make any real difference to their risk or return.

It should not be surprising that an open ended fund of funds which buys other open ended vanguard index funds who in turn buy stocks and bonds on a market, should have transaction costs. You would not expect those costs to be particularly high in relation to total assets - and based on their disclosure, they're not. So I don't see that it "makes quite a big difference to VLS". It is "business as usual" for VLS and VLS's investors.

dunstonh

Transaction costs are interesting because it gives insight to the fund houses that were hiding them from the OCF and those that were declaring them in their OCF.

It is not an increase in charges. The charges have always been there. It is just an issue about transparency.

How many people bought VLS instead of L&GMI because they though VLS was cheaper? Some did as we know from many threads on here that cost was their driver for the purchase. Those people may feel they were misled.

The returns are totally unaffected by the new disclosure.