platform for individual shares/etf purchasing

jamels2

Hey all,
I have set up a vanguard account for investing in the global all cap index fund, which will be my main focus, but I would also like to buy a few individual shares/etf's for a bit more excitement, and unsure what app/platform to use?
a friend at work uses etoro to buy and sell bitcoin, and company shares, but its very American and converts to dollars. I am aware of freetrade, can anyone recommend this? Or am I better off with more established firms like X-O for example?
I'd love to hear your recommendations. As I said I'm putting 90% of my available funds to vanguard as its the safest option, but I just want a small part of my portfolio to play with elsewhere.
Many thanks for any replies.

bowlhead99

X-O.co.uk from Jarvis is fine. You can buy and sell cheaply on the UK market with no frills, and if you want to hold the share certificates in paper form (rather than electronic via nominee) so that you can get access to shareholder perks, it doesn't cost much for them to do that for you.

However, they don't cover trades settled on foreign markets so if you want to buy Tencent or Tesla you would no doubt need to look elsewhere. But if you want to dabble in foreign shares with the 10% that's not in trackers, you could of course buy actively managed 'investment trusts' which are traded just like shares on the UK stock exchange and so could be bought by X-O.

If the 10% of your portfolio you're talking about is £100k you will be able to build up a portfolio of 20 shares of £5k each, and so the cost of £5-10 to purchase each of them with mainstream brokers is pretty immaterial. But if you are only investing £500-1000 at a time, such fees would be a percent or so, and the same again when you come to sell. Personally I've moved most of my investing to one platform (AJ Bell) as it has what I need (UK and some international shares, investment trusts, etfs, open ended funds from whole of market) and the price structure is OK. But if you have niche requirements and don't need open ended funds etc, you may find they're served by some of the newer fintechs.

Still, steer clear of the fun get-rich-quick programs from etoro like 'copytrader' which could be a fast route to lose your money without adequate control over what you're buying.

ColdIron

In your other thread you were talking about £100 per month in a fund so £1,200 a year for 90% of your portfolio. That's roughly £130 for shares in, let us say, a single company or ETF. If the transaction cost was a fiver to buy and another to sell your shares would need to grow about 8% just to stand still. The more companies or ETFs the worse it gets. Have you considered the economics of this strategy? Tiny shareholdings rarely make sense

jamels2

Hi, 100 pcm is the minimum, I will aim to increase that to 500 as I'm 40 next year and need to get started quickly.
I have read that Free trade offers the VWRL ETF and is free , is this a consideration?

bowlhead99

jamels2 wrote: »

Hi, 100 pcm is the minimum, I will aim to increase that to 500 as I'm 40 next year and need to get started quickly.
I have read that Free trade offers the VWRL ETF and is free , is this a consideration?

You already have an account with Vanguard, which is free to transact and offers Vanguard ETFs and funds, and you are already putting 90% of your Investment money into that platform. So the 10% that you are going to put somewhere else is not going to be a lot of money.

Now you are telling us that the investment which you are proposing to buy on freetrade may be VWRL, which you could get on Vanguards platform and is similar to to the global all cap index you identified?

£1000 of assets held on Vanguard's platform is £1.50 a year. Vanguard have literally trillions of dollars of assets under management and administration and will be here for years to come.

Freetrade are a small operation who hope to be able to place your trades on a stock exchange and settle them with no apparent fees, by either skimming off a commission between the buy and sell prices, or by sharing your costs with all the other people who want to buy the same stocks the same day and then subsidising that cost with a few pounds of revenue from people who want to control their own real-time trades. So either they will not make any real money and go bust, or they will make real money by making you perhaps pay more for the purchases and receive less for the sales of assets you make, than if you had gone to a more traditional provider that charged brokerage fees.

I would prefer to use Vanguard at their 'reassuringly expensive' prices which allow them to stay in business, though the existence of small efficient fintechs at loss-leader prices is generally a good thing for consumers if some of them stick around long enough to acquire all the casual customers and monetise them somehow.

head_to_head

bowlhead99 wrote: »

Freetrade are a small operation who hope to be able to place your trades on a stock exchange and settle them with no apparent fees, by either skimming off a commission between the buy and sell prices, or by sharing your costs with all the other people who want to buy the same stocks the same day and then subsidising that cost with a few pounds of revenue from people who want to control their own real-time trades.

Are they allowed to do the former in the UK? Would that be consistent with "best execution", which UK brokers produce various documents about (which I never read, to be fair)?