NATWEST Stocks & Shares ISA - good investment?

ileven1225

Audaxer wrote: »

Vanguard LifeStrategy funds are low cost globally diversified multi asset funds that come in 5 different risk levels - from a very cautious 20% equities to a high risk 100% equities. Other good options worth considering are HSBC Global Strategy funds and L&G Multi Index funds. A VLS60 (60% equities) for instance is medium risk and is a good option in my opinion. Bear in mind risk here means volatility, not risk of permanent loss. In a bad equity crash a VLS60 may drop 20% to 30% in value, but that would be a very bad time to sell the fund as that would crystallise your losses. More experienced investors would see that as a good time to invest more in the fund if they have spare cash available, because in the long term equities do continue to grow on an upward trend despite equity crashes every now and then.

You can really learn a lot by reading this forum and searching for more info, as well as reading on sites like Monevator. Once you have a good grounding in understanding investments I think you will realise that going through a bank for investments is not the best option to take. You would not be decreasing risk by going via a bank, just increasing costs and lowering returns in choosing the same risk level than you can get by DIY investing in low cost multi asset funds.

Thanks. It's really helpful!

It is nearly end of tax year and so i would like to use my ISA £20k allowance. I need to talk to someone that could give me guidance. I am prepared the worst scenario. So if Natwest provides some convenient guidance, even the risk is equal and the return is less than other non-bank fund, I probably still prefer Natwest as i really don't have time now for all background research/homework. I will do sufficient homework later on and invest other funds next year, hope the plan will work and what I said makes sense!

ileven1225

Audaxer wrote: »

Vanguard LifeStrategy funds are low cost globally diversified multi asset funds that come in 5 different risk levels - from a very cautious 20% equities to a high risk 100% equities. Other good options worth considering are HSBC Global Strategy funds and L&G Multi Index funds. A VLS60 (60% equities) for instance is medium risk and is a good option in my opinion. Bear in mind risk here means volatility, not risk of permanent loss. In a bad equity crash a VLS60 may drop 20% to 30% in value, but that would be a very bad time to sell the fund as that would crystallise your losses. More experienced investors would see that as a good time to invest more in the fund if they have spare cash available, because in the long term equities do continue to grow on an upward trend despite equity crashes every now and then.

You can really learn a lot by reading this forum and searching for more info, as well as reading on sites like Monevator. Once you have a good grounding in understanding investments I think you will realise that going through a bank for investments is not the best option to take. You would not be decreasing risk by going via a bank, just increasing costs and lowering returns in choosing the same risk level than you can get by DIY investing in low cost multi asset funds.

I will look at HSBC as well! Bank sounds a bit conservative which is perhaps what I shall start with!

rathernot

ileven1225 wrote: »

Thanks. It's really helpful!

It is nearly end of tax year and so i would like to use my ISA £20k allowance. I need to talk to someone that could give me guidance. I am prepared the worst scenario. So if Natwest provides some convenient guidance, even the risk is equal and the return is less than other non-bank fund, I probably still prefer Natwest as i really don't have time now for all background research/homework. I will do sufficient homework later on and invest other funds next year, hope the plan will work and what I said makes sense!

Something to keep in mind is that the deadline is for putting the £20k in the ISA wrapper.

It doesn't mean you have to have it invested in investments by the deadline.

Something I'd consider is look at a low cost provider such as IWEB as you can pay £25/year for the ISA wrapper and then pay per fund purchase.

It means you can do something quickly and low cost to get your money into the ISA wrapper and then you can take your time working out which investments you want.

Do keep in mind that paying per purchase may not be viable if you're investing each month but if you plan to just make 1 purchase a quarter/year it's something to consider and it won't tie you to only Vanguard funds if you're unsure what you may want to do once you understand the choices a bit better.

rathernot

IanManc wrote: »

You do not pay "£25/year" with IWEB.

There is a £25 one-off charge for the first dealing account you open, and then all you pay is dealing costs of £5 per trade.

There is no annual charge.

Thanks, my mistake, I thought it was an annual fee, makes them even cheaper now.

ValiantSon

IanManc wrote: »

I agree with your suggestion of IWEB as an inexpensive platform, and your point about access to a wide selection of funds.

As both you and dunstonh have pointed out, Vanguard is a tied provider, and there is no benefit in being tied to the products of one fund house. This becomes more important as your investments increase in size and you learn more about investing and want to widen your investment choices.

IWEB has a clear website, a decent selection of funds, no annual flat fee or annual percentage platform charge, and is a good option if you're not going to trade very frequently. And it is part of Halifax, so about as safe as any of these platforms can be.

If someone has made the decision that, for the time being, they are going to invest in Vanguard funds, and that their investment amount over the next year (at least) will not exceed c.£55,000, then investing via Vanguard Investor is the cheapest way of doing it. The investor is not tied to Vanguard by doing this, as they can transfer out to a different platform at any time that they wish to do so, and Vanguard Investor do not charge any exit fees.

I keep reading comments about people being "tied to Vanguard" if they use Vanguard Investor, but that is very misleading, They are not tied to Vanguard, but can only purchase Vanguard funds on that particular platform (and some actually managed by others, e.g. the Global Equity Fund managed by Baillie Gifford - thanks to Alexland for pointing this out previously). Assuming that the Vanguard Investor Account is an ISA there is nothing stopping an investor also having a GIA on a different platform at the same time; they are not forced to only invest with Vanguard, which is what the term, "tied" implies. Furthermore, as stated above, they are not even "tied" with the ISA, because they can transfer it out at no cost to another platform, should they wish to diversify their investments into other funds within the ISA wrapper.

iWeb do offer a cheap option for those investing larger sums, or those investing occasionally, e.g. only once or twice a year.

ileven1225

rathernot wrote: »

Something to keep in mind is that the deadline is for putting the £20k in the ISA wrapper.

It doesn't mean you have to have it invested in investments by the deadline.

Something I'd consider is look at a low cost provider such as IWEB as you can pay £25/year for the ISA wrapper and then pay per fund purchase.

It means you can do something quickly and low cost to get your money into the ISA wrapper and then you can take your time working out which investments you want.

Do keep in mind that paying per purchase may not be viable if you're investing each month but if you plan to just make 1 purchase a quarter/year it's something to consider and it won't tie you to only Vanguard funds if you're unsure what you may want to do once you understand the choices a bit better.

That's even better, make the options open!

ileven1225

IanManc wrote: »

I agree with your suggestion of IWEB as an inexpensive platform, and your point about access to a wide selection of funds.

As both you and dunstonh have pointed out, Vanguard is a tied provider, and there is no benefit in being tied to the products of one fund house. This becomes more important as your investments increase in size and you learn more about investing and want to widen your investment choices.

IWEB has a clear website, a decent selection of funds, no annual flat fee or annual percentage platform charge, and is a good option if you're not going to trade very frequently. And it is part of Halifax, so about as safe as any of these platforms can be.

Does it mean, if i put £20k into IWEB, then i can select Natwest, Vanguard, HSBC, etc funds flexibly? Am I correct?

rathernot

ileven1225 wrote: »

That's even better, make the options open!

Note the correction above on the IWEB setup fee.

Trust me on this, do your homework as hours spent now exploring options can have a massive impact on your future investment value.

Vanguard make some great products but let's say that once you've done all your homework you decide you want to put £18k into Vanguard but be a little more adventurous and put £2k into Fundsmith or Scottish Mortgage Trust.

You can't do that if you're using the Vanguard platform directly but you could with other platforms.

For me it's a cake and eat it to use someone with the widest choice but make sure the fees make sense for your model of investing - depending how often and what you're buying one model may make more sense than another.

ileven1225

rathernot wrote: »

Note the correction above on the IWEB setup fee.

Trust me on this, do your homework as hours spent now exploring options can have a massive impact on your future investment value.

Vanguard make some great products but let's say that once you've done all your homework you decide you want to put £18k into Vanguard but be a little more adventurous and put £2k into Fundsmith or Scottish Mortgage Trust.

You can't do that if you're using the Vanguard platform directly but you could with other platforms.

For me it's a cake and eat it to use someone with the widest choice but make sure the fees make sense for your model of investing - depending how often and what you're buying one model may make more sense than another.

£25 one off payment, and £5 per trade is very reasonable! I would expect often trades as I probably select and invest a 4 funds (so £5x4=£20) and wait for another 3-4 months to check. I would wait for a year to see the outcome.

I will definitely consider IWEB as it provides flexibility to select different funds in one tax year! I would put about £20k into IWEB firstly before April and do my homework afterwards to carefully select funds. Selection would not in rush but i need to put the money into ISA before April!

Thanks!:beer:

ileven1225

IanManc wrote: »

Yes, you're correct.

IWEB give access to hundreds of fund houses, all of which have many funds.

Fund providers you might want to check out for passive index funds, or multi-asset funds, are Vanguard, HSBC, Fidelity, and Legal and General, though there are others.

You can split your £20k between as many funds as you like, but you'll pay a £5 fee for each deal, so if you pick too many your costs will start to rack up.

This website http://monevator.com/category/investing/ is worth a look to help you learn about investing.

Thnaks a lot!