Investing in the 'S&P500' from the UK

[Deleted User]

Hi,

I would like to invest say £30000 in the S&P500 from the UK.

I used to have a share dealing account with my bank but cancelled that a year ago.(I only have a few shares of a certain company) and didn't use often.

Can anyone advise the best route to invest in this fund from the UK?

Thanks in advance.

eskbanker

I imagine that most on here would recommend a more rounded view of investing, i.e. what your objectives are, attitude to risk, other assets, etc, rather than leaping straight to an index (this isn't a fund).

One of the key investment principles is to diversify as widely as possible, so bunging a significant pile into one particular market without spreading risk elsewhere seems rash, unless you have a particularly well thought-out rationale and/or other investments (which to be honest seems unlikely if you're effectively at page one).

However, if you're convinced that this is a sensible thing to do, there are tracker funds that follow this index, and low-cost platforms on which to hold them, which are compared at https://monevator.com/compare-uk-cheapest-online-brokers/

bowlhead99

'the S&P500' isn't a fund, it's an index of shares. Various product providers (such as Vanguard, BlackRock iShares, HSBC, L&G, SPDR etc) create investment funds to track the market. The funds are available as different structures and will have different ongoing management charges (usually not much more than 0.1% a year).

The funds would generally either be Open Ended Funds ( OEICs/ ICVCs / Unit Trusts), which you would hold on a fund platform, or they would be stock-market listed Exchange Traded Funds (ETFs) listed on a stock market.

You can buy ETFs on the stock exchange via a cheap stockbroker like https://www.x-o.co.uk, but if you want to invest in an OEIC / ICVC /UT you would need a funds platform (those funds platforms will invariably also have stockbroking archives to let you buy ETFs but the opposite isn't always true). Popular platforms include IWeb, AJ Bell You invest, Interactive Investor, Hargreaves Lansdown. They have different fee structures for buying and holding investments and you could compare by looking at a platform comparison site (Google is your friend or search here for loads of links to comparison tables other than the one eskbanker linked, though that one is decent enough).

Sometimes it is more expensive if you want to do the investment inside an ISA to save income and capital gains taxes but you may not be expecting gains to be big enough to be taxable if you're only doing it for the short term.

[Deleted User]

eskbanker wrote: »

I imagine that most on here would recommend a more rounded view of investing, i.e. what your objectives are, attitude to risk, other assets, etc, rather than leaping straight to an index (this isn't a fund).

One of the key investment principles is to diversify as widely as possible, so bunging a significant pile into one particular market without spreading risk elsewhere seems rash, unless you have a particularly well thought-out rationale and/or other investments (which to be honest seems unlikely if you're effectively at page one).

However, if you're convinced that this is a sensible thing to do, there are tracker funds that follow this index, and low-cost platforms on which to hold them, which are compared at https://monevator.com/compare-uk-cheapest-online-brokers/

Thanks.

Attitude to risk : Medium
Assets : Flat mortgage free £150k
Cash in bank : 60k (Cash sitting in bank is earning below inflation interest.)
Shares in one company £20k
Objective : Earn 7-10% per year on cash in bank

Thank you

Sorry bit of novice..

Username999

See IUSA

here...

https://www.hl.co.uk/shares/shares-search-results/i/ishares-plc-s-and-p-500-ucits-etf-dist

SonOf

I would like to invest say £30000 in the S&P500 from the UK.

One assumes you are not doing so on that being your only equities investment?
After all, the US has been the standout sector in this economic cycle but it is very rare for a sector to be the best in two cycles in a row. And you must not forget that the US under-performed nearly everyone in the previous cycle. And this cycle is drawing to a close (although it seems to be dragging on).

And we must not forget how the fall in Sterling has also benefited global investments for UK investors. If, as expected, Sterling begins to rise again, this will hurt global investment pricing in the UK.

If its not part of a wider equities portfolio then that would be very poor quality investing. 100% into any sector is just not sensible investing.

New investors with relatively low or non-existing investment knowledge tend to make mistakes like investing 100% in one sector (single sector fund) or investing above their risk profile or jumping in after all the growth has happened without understanding the risks. Is that what you are doing?

edit added as more posts arrived as typing mine....

Attitude to risk : Medium

So, in isolation of a wider portfolio, a S&P500 tracker would be higher risk and not suitable for you.
And without other investment areas, this would be a poor quality investment decision.

[Deleted User]

SonOf wrote: »

One assumes you are not doing so on that being your only equities investment?
After all, the US has been the standout sector in this economic cycle but it is very rare for a sector to be the best in two cycles in a row. And you must not forget that the US under-performed nearly everyone in the previous cycle. And this cycle is drawing to a close (although it seems to be dragging on).

And we must not forget how the fall in Sterling has also benefited global investments for UK investors. If, as expected, Sterling begins to rise again, this will hurt global investment pricing in the UK.

If its not part of a wider equities portfolio then that would be very poor quality investing. 100% into any sector is just not sensible investing.

New investors with relatively low or non-existing investment knowledge tend to make mistakes like investing 100% in one sector (single sector fund) or investing above their risk profile or jumping in after all the growth has happened without understanding the risks. Is that what you are doing?

I'd suggest your correct thank you.

NoMore

Stop reading american blogs that contain advice for americans which doesn't necessarily translate to being good advice for the UK!

danm

Deleted_User wrote: »

Thanks.

Attitude to risk : Medium
Assets : Flat mortgage free £150k
Cash in bank : 60k (Cash sitting in bank is earning below inflation interest.)
Shares in one company £20k
Objective : Earn 7-10% per year on cash in bank

Thank you

Sorry bit of novice..

With a medium attitude to risk you are going to struggle to earn 7-10%.


If you went ahead with your plan, the above suggests you will then have 50K invested (60% in S&P/40% in a single stock) - that, but most measures is a very high risk strategy.


Assuming you can sell the single stock, you may wish to consider putting the 50K into a multi-asset fund (check Vanguard Lifestrategy, or HSBC Global Strategy) - Their higher risk offerings (LS100 for example is 100% equities) may get you towards you target on a long term average basis, but be prepated for a bumpy ride as it requires a high risk strategy with potential for significant paper loses - but opportunity to see significant growth over the longer term.

[Deleted User]

danm wrote: »

With a medium attitude to risk you are going to struggle to earn 7-10%.


If you went ahead with your plan, the above suggests you will then have 50K invested (60% in S&P/40% in a single stock) - that, but most measures is a very high risk strategy.


Assuming you can sell the single stock, you may wish to consider putting the 50K into a multi-asset fund (check Vanguard Lifestrategy, or HSBC Global Strategy) - Their higher risk offerings (LS100 for example is 100% equities) may get you towards you target on a long term average basis, but be prepated for a bumpy ride as it requires a high risk strategy with potential for significant paper loses - but opportunity to see significant growth over the longer term.

Yes the stock I can sell now if wanted for £20k and I also have the £60k liquid.

I put 'medium' risk due to not wanting to go gung ho but by the sounds of it I am open to higher calculated risks..

Thanks

Anonymous101

Deleted_User wrote: »

Thanks.

Attitude to risk : Medium
Assets : Flat mortgage free £150k
Cash in bank : 60k (Cash sitting in bank is earning below inflation interest.)
Shares in one company £20k
Objective : Earn 7-10% per year on cash in bank

Thank you

Sorry bit of novice..

Its ok to be a novice, everyone was at one point.


You post highlights a great contradiction.
- £60k in cash is risk averse to a point of being damaging IMO (as you point out you're losing value to inflation)
- Shares in a single company are always a risky investment IMO.
- Likewise but less so is investing in one countries stock market
- 7-10% return will not be achieved with a medium risk tolerance. Perhaps aim for a more medium return of a percent or two above inflation?


I'd suggest doing some reading on simple investing strategies, read Monevator blog or one of the many good books on index investing.


Personally I'd be reducing the cash down to £10k or so for an emergency fund and selling the single company share and investing in a global equity index tracker or something like vanguards lifestyle 100 fund as a starter.