Low cost ISA for small monthly investment

alisonwells455

I am trying to find an ISA with low fees but also low trade costs for a monthly investment. I wanted a FTSE tracker but it seems there are monthly trade costs. Does anyone have a recommendation for a tracker ISA that doesn’t charge high fees for monthly investment?

Alexland

Vanguard Investor are 0.15% platform fee but require a minimum £500 lump sum or £100 per month commitment to get started. Once you have met the minimum a forum member has successfully reduced the monthly payment below £100 per month.

For £50 per month consider a Cavendish ISA at 0.25% and for £25 per month consider Hargreaves Lansdown at 0.45% but HL have some discounts that save around 0.10% on certain funds such as Blackrock Consensus 85.

None of the above charge trade fees on funds. HL have an exit fee you might have to pay eventually unless FCA ban such fees before then.

Alex

eskbanker

alisonwells455 wrote: »

I am trying to find an ISA with low fees but also low trade costs for a monthly investment. I wanted a FTSE tracker but it seems there are monthly trade costs. Does anyone have a recommendation for a tracker ISA that doesn’t charge high fees for monthly investment?

Just in case you're not aware of it, you're really needing two separate things - an ISA (which is a wrapper that you manage via its platform) and one or more investments that you put inside that wrapper (such as a tracker or other fund).

Alex highlights some options for the platforms, and you can evaluate (the costs of) the leading players for your desired investing pattern at comparison sites such as:

http://monevator.com/compare-the-brokers/
http://www.comparefundplatforms.com/
https://forums.moneysavingexpert.com/discussion/5583030

In terms of the separate question of what to actually invest in (which you should establish before choosing a platform), your reference to 'a FTSE tracker' may flag an issue, depending on exactly what you mean. It's always advisable to diversify widely when starting investing, so investing only in one specific market (such as the UK, e.g. via FTSE 100 or 250) is unnecessarily risky and putting your eggs into many more baskets makes sense for most. There are global indices such as the Vanguard FTSE Global All Cap though, if that's what you meant, or a number of wider global multi-asset funds such as the Blackrock Consensus as mentioned above, plus Vanguard's LifeStrategy range, HSBC Global Strategy and L&G Multi-Index....

alisonwells455

I am struggling with what to put in the ISA. I am looking for a low cost, long term (15-20 year) growth investment. I had been told the FTSE 100 tracker was a good bet for this year but seems to incur costs with monthly incest,met. I am very open to other suggestions for funds with a good spread that won’t charge much for a monthly contribution of about £200.
Thank you

Alexland

Consider the Vanguard LifeStrategy 80 fund on Vanguard Investor. If the stock markets crash it could go down circa 40% but you have long enough to ride it out. Reduce risk as you get closer to withdrawal.

Also consider if additional pension or lifetime ISA (if applicable) might be more advantageous for your circumstances.

Alex

eskbanker

alisonwells455 wrote: »

I am struggling with what to put in the ISA. I am looking for a low cost, long term (15-20 year) growth investment. I had been told the FTSE 100 tracker was a good bet for this year but seems to incur costs with monthly incest,met. I am very open to other suggestions for funds with a good spread that won’t charge much for a monthly contribution of about £200.

While Alex's suggestion is sound, I'd recommend that you spend more time researching first so that you really understand what your options are and how to choose between them.

There is plenty of readily accessible information in the public domain at sites such as:

https://www.moneyadviceservice.org.uk/en/articles/investing-beginners-guide
https://www.hl.co.uk/beginners-guides/investing
http://www.monevator.com
http://diyinvestoruk.blogspot.com/

The first link includes a page all about understanding costs, including the difference between platform costs (including the trading cost you refer to) and fund costs (the ongoing fund-specific charges).

Apologies that this isn't a simple "here's one I prepared earlier" definitive answer to your question(s) but personally I think it's really important that novice investors take the time to get to grips with the fundamentals when making decisions that have such far-reaching consequences, rather than simply taking the word of random internet strangers....

xylophone

I had been told the FTSE 100 tracker was a good bet for this year but seems to incur costs with monthly incest

Crumbs! I hope not!:eek: