Fund investment through HSBC

pilotamx

Hi all,

I have a sum to invest (around 50k) and I am considering fund based on corporate bonds in the UK.
As I have an account in HSBC, I would consider it for investing, rather them splitting money into another account.
General idea is to put money into for medium-term and, maybe, sell fund for buying a property in the next 5 year. I am not sure about buying directly bonds (which anyway seems not part of HSBC investment).

Any idea on this? Is anyone using HSBC investment platform?

thanks
S

bowlhead99

pilotamx wrote: »

Hi all,

I have a sum to invest (around 50k) and I am considering fund based on corporate bonds in the UK.
As I have an account in HSBC, I would consider it for investing, rather them splitting money into another account.

Your wording / grammar is a bit confusing. Do you mean you already have an investment account with HSBC? Or a bank account with HSBC? You can't put investments in a bank current account or savings account or cash deposit accounts; such accounts are for cash only.

If you mean you already have an investment account with HSBC and would consider it for investing rather than opening a new account, then fair enough. You will already know how that investment account works and what investments it can hold and what it costs.

If instead you mean you already have a bank account with HSBC and think you should open an account with them for investing as well: you can do that, but it will be another part of HSBC and not entirely seamless; you might as well shop around for a better deal from other providers.

The HSBC Global Investment Centre lets you hold a range of funds. For £50k they are relatively expensive as they have an ongoing charge for using the platform of 0.39% a year, which is separate from the management fees / running costs of the actual fund itself which you are going to select from among the choices they offer. 0.39% of £50k is almost £200 a year.

There are other providers offering fund platform services for 0.25%, or some that don't use a percentage basis at all and simply charge a flat account opening fee or fixed ongoing £ cost per year, and a transaction fee each time you want to buy more fund units or sell some fund units. Using someone like Halifax Sharedealing or IWeb, who have their own funds centre - instead of HSBC - would get you a platform fee in the tens of pounds instead of hundreds of pounds.

General idea is to put money into for medium-term and, maybe, sell fund for buying a property in the next 5 year. I am not sure about buying directly bonds (which anyway seems not part of HSBC investment)

The global investment centre service is a fund platform and focussed on the sort of investment most retail customers want, which is to buy funds which hold a widely diversified portfolio of underling assets (whether shares, bonds, property etc).

If you want to select and hold individual bonds offered by governments or companies you just need a stockbroker service where you can pick your own individual shares or bonds and buy them on the market. HSBC have a basic service called InvestDirect which can be opened by their current account customers. Obviously, buying individual bonds is more risky than buying funds that hold lots of bonds, as an individual bond might suffer a default, or a severe loss of value if market conditions change (interest rates, the company's competitive position, etc) or the creditworthiness of the issuer of the bond worsens.

Tom99

[FONT=Verdana, sans-serif]What attracts you to corporate bonds? The general view seems to be that they will go down in value over the next few years if interest rates rise as expected.[/FONT]
[FONT=Verdana, sans-serif]In a perfect market you would expect this anticipated rise in interest rates to already be priced into today's bond values but the market does not always work that way.[/FONT]

pilotamx

True, I wasn't clear. I have just an HSBC current account. I have my ISA and LISA with nutmeg.
Now, I am considering to invest in funds based on bonds/shares. Why this, not a true reason probably. In the jungle of possibilities, I don't want to takle with shares and volatility, I perceive a balanced fund (bonds, shares, money) a little bit more safe and stable, with potentially less gain.
There's a price to pay for a fund, I know. I pay anyway a price to nutmeg, and up to know, after 7 months, the return is still 0% (based on 4 different pots I have).
I am not seeking a solid 10% per year. I can enjoy a 5% or something. To be honest, I am not sure about the possibly 'best' solution with the market.
Finally, why the UK? It is because I want to avoid currency risk. An unbalanced portfolio with 50% or more on foreign currency is not what I am looking for.

S

IanSt

pilotamx wrote: »

I am not seeking a solid 10% per year. I can enjoy a 5% or something.

Getting anywhere near 5% in bonds is going to mean you're investing in the riskier side of things where you could lose money and in your OP you mentioned that you may want to get your investment out within the next 5 years and purchase a house.

If that really is the case and this sum is going to be an important factor in your ability to buy, then in my opinion you're better off putting this cash into a savings account - the NS&I is offering 2.2% per year for 3 years at the moment.

dunstonh

I pay anyway a price to nutmeg, and up to know, after 7 months, the return is still 0% (based on 4 different pots I have).

Pretty obvious why that is.

I am not seeking a solid 10% per year. I can enjoy a 5% or something.

If that is the objective, why are looking to invest so heavy in bond funds? You are going to either need higher risk bonds or your expectations are out of sync with reality.

An unbalanced portfolio with 50% or more on foreign currency is not what I am looking for.

An unbalanced portfolio in Sterling shouldnt be what you are looking for either.

pilotamx

ok, I recognized I explained very bad what I want and I am looking for, mixing ideas with decisions.
I make a step back. First question was around HSBC investing platform, and I understand can be ok, but quite expensive.
Looking online I found multiple list of platforms, actually I am looking to Interactive Investors and Hargreaves Lansdown. I've seen just now that HL has also LISA, this can be interesting if I consider to move out from Nutmeg and have just one platform.
I will continue my analysis later this week. I might consider to build my portfolio rather then putting all money into a couple of funds. I do not know at the moment.

Thx
s

dividendhero

I do have a share account with First Direct - not sure if it's the same as parent HSBC use, but to be honest it's pretty primitive by the standards of the likes of HL.

dunstonh

HSBCs platform is cut down and basic and aimed at people who dont know what they are doing.

dqnet

dunstonh wrote: »

Pretty obvious why that is.

Just out of interest.. why is it obvious?

verybigchris

I used to have a Global Investment Centre account with HSBC, and it worked out well for me. Although the platform fee is advertised at 0.39%, they constantly make minor mistakes and then waive the fee by way of apology, so I probably paid closer to 0.2%. Then there's no other fees on top of that (trading fees, ISA fees, etc) so I got a pretty good deal from them.