Advantages of different s&s isas

Oliver1191

Hello all,

For the last 2 years, i have been investing in my hargreaves lansdown isa.

One of the benefits of this isa is the wealth 50 funds having a discount and the ability to buy and sell these freely.

In the next financial year, i'm thinking of starting a vanguard isa to build up an index portfolio at low cost.

I'm 36.

1. Do you think at my age it's better continuing yo try snd outperform the market with manages funds at hl? I'm invesying for the very long term.

2. Do any other platforms offer 'benefits'?

Thanks!

shinytop

1. There is no evidence that HL's marketed funds will outperform the market (and there is some evidence that they haven't!). HL's relatively high fees can offset any discount they give. HL is very good in terms of service though.
2. Other platforms that charge a flat fee can work out cheaper depending on your ISA size. You need to work it out. You could use % based until you reached £XX then transfer to a flat fee based.

Are you also contributing to a pension and/or LISA? Both could be better for you than a simple ISA because of their tax treatment, especially if you are in it for the long lerm.

AnotherJoe

I think it's pointless trying to outperform the market with HLs recommended funds because recent events have confirmed they are no more likely to outperform than a blindfolded monkey throwing darts at the FT.
HL has certain advantages such as s good service and low fees on some investment types, but NOT funds. There may or may not be reasons to use them for funds (I do for a few because I don't have many, mostly have ITs, and shares and want the simplicity) but there's no evidence at all that so called wealth 50 has any special relevance and recent events have showed that in spades, they kept recommending* a fund for years after it was clear they knew it had issues.
I suggest you buy low cost global trackers possibly supplemented by areas you might fancy an emphasis in. I wouldn't recommend flavour of the month Vanguard Lfestrategy because of its artificial 25% "U.K." weighting. But there are others from vanguard and also other suppliers such as L&G and Blackrock.

* technically I'm sure they aren't recommending but that's what many take it as.

Tom99

Or choose Vanguard Lifestrategy because you think having 75% in non UK shares is enough.

Linton

I think the hassle of managing multiple S&S ISAs is more important a factor than minor cost differences achieved by having the optimal platform for each fund you happen to choose to invest in. What happens if you want to move money from one investment to another? What happens if you want to use part of your £20K ISA allowance for one fund and part for another when you are limited to only contributing to one ISA in a Tax Year?

Much better to choose one platform that provides the best environment for your portfolio as a whole.

AnotherJoe

Tom99 wrote: »

Or choose Vanguard Lifestrategy because you think having 75% in non UK shares is enough.

I put "UK" in quotes for a reason. The companies that make up the 25% "UK" contingent of VLS are actually massive global companies that almost arbitrarily happen to be listed on the FTSE.

So what you end up with is a skew into a handful of industries (pharma, extraction and finance) rather thana skew into one country, and probably in reality 95% or so is global just like all the rest of the companies, with maybe 5-6% UK in terms of a source of revenues.

Better IMHO to either be fully global, or if you want an "enhanced UK" presence, buy 75% global and 25% FTSE250. Or any other % that meets your needs, after all 25% is completely arbitrary there's no economic reason to it other than it sounds good)

cfw1994

AnotherJoe wrote: »

I put "UK" in quotes for a reason. The companies that make up the 25% "UK" contingent of VLS are actually massive global companies that almost arbitrarily happen to be listed on the FTSE.

So what you end up with is a skew into a handful of industries (pharma, extraction and finance) rather thana skew into one country, and probably in reality 95% or so is global just like all the rest of the companies, with maybe 5-6% UK in terms of a source of revenues.

Better IMHO to either be fully global, or if you want an "enhanced UK" presence, buy 75% global and 25% FTSE250. Or any other % that meets your needs, after all 25% is completely arbitrary there's no economic reason to it other than it sounds good)

What low-cost fund would you suggest to be “fully global”?

It strikes me that the Vanguard LS funds are a great easy solution to get in that general direction......but always keen to hear other suggestions.

I do like the Lars Kroijer approach, but saying “buy a low cost total world equity market tracker fund” is easier said than done!

campbell19925

Buy Vanguard 100 and forget about it for the next 20 years. Job done.

shinytop

cfw1994 wrote: »

What low-cost fund would you suggest to be “fully global”?

Something like this?

HSBC GLOBAL ASSET MANAGEMENT UK FTSE ALL WORLD INDEX C ACC NAV

It's 0.19%. To get much lower with units trusts you have to mix and match individual index trackers yourself. A step too far for me.