Which broker for VWRP?

[Deleted User]

Hi,
I'm considering opening a S&S ISA and investing in Vanguard VWRP but I'm not seeing it as an option on https://www.vanguardinvestor.co.uk/
Can anyone recommend the best broker to go with or how I can figure it out? I assume they'll have different costs and I'm only interested in this particular fund.
Many thanks

masonic

You're right, they don't appear to offer it, but they do offer VWRL, which is the income distributing version of the same fund. HL appear to offer it, but it would be rather pricey to go there vs Vanguard.

ChesterDog

I have just bought some on HL.
Charges are competitive if you have sufficient amount with them, because although it's 0.45% pa it is capped for ETFs, ITs and shares, depending on the account.

[Deleted User]

Anyone else?

Alexland

VWRP is showing as available to buy on AJ Bell YouInvest and they have lower % charges, ETF trade fees and capping than HL. However if this is a new account then the valuation might not be high enough to justify paying trade fees to HL or AJB. It's showing on iWeb who are good for large or fairly inactive accounts.

You could try contacting Vanguard Investor to see if they will add it. It might be better to just buy VWRL and reinvest the distributions or if you really want accumulation the Vanguard Global All Cap fund which is very similar.

Sue58

Deleted_User said:

Anyone else?

Fidelity and charges are capped at £45 per annum for ETF's and IT's.

[Deleted User]

Thanks all.
I'm trying to work out now whether it'd be better to go direct (and go with VWRL) and pay less in charges / platform fees, versus going via a broker and going for the accumulating version / auto reinvest of dividends (VWRP).
Can anyone offer opinions on these two options?
Thank you

bowlhead99

Deleted_User said:

Thanks all.
I'm trying to work out now whether it'd be better to go direct (and go with VWRL) and pay less in charges / platform fees, versus going via a broker and going for the accumulating version / auto reinvest of dividends (VWRP).
Can anyone offer opinions on these two options?
Thank you

You can see the published charges at all the major platforms. You are the one who knows how much you intend to invest and when (all at once and then nothing ever again? a new contribution every month? twice a year?).

You can imagine that the dividends are doing to be a couple of percent a year. If you receive them in your broker/ investment platform's account it's not very much hassle to invest them along with new money you might fancy investing from time to time. If 2% annual dividend is received quarterly you can imagine having half a percent of your assets sitting uninvested until you do something about it. 

If you let it sit there idle until you receive the next one a quarter later, before doing anything about it, and deal with two dividends-worth of money at once, you will have missed out on a quarter of a year's total return on that half a percent of your assets. Imagine the total return for the year was going to be 6%. So 0.5% of your assets idle at 6% a year for a quarter of a year is how much it is 'costing you' to only reinvest the dividends twice a year instead of every quarter as they arrive. 

Putting that into pounds: £10000 invested. £50 quarterly dividend received. Pretend 6% potential annual return on the £50 is foregone if you take a year to deal with it (£3 missed return). If you deal with it the next quarter when the next £50 arrives, you've not foregone as much as £3, only a quarter of that (75p)

75p missed return caused by waiting until the next quarter to deal with the £50, by which time you might be reinvesting new money anyway, is not much of a waste. It is under 0.01% of the £10,000.

You could pay 0.15% to VanguardInvestor as an ongoing platform fee and then make as many free trades as you like. You may prefer to use a fixed fee provider and use an accumulating product. If you are only investing £1000 it would be very expensive to use a broker that charged £5 to invest the £1000 for you (0.5% of the trade size). Whereas if you were investing £40,000 you might prefer to use a fixed fee broker rather than pay Vanguard investor 0.15% (£60) for unlimited annual transactions.

[Deleted User]

Thanks bowlhead99, that clears it up a little. I was considering an initial £5k followed by monthly £300. 

Alexland

For that amount and pattern then Vanguard Investor VWRL and reinvest the distributions or Global All Cap accumulation fund and forget about it.

When the account gets to around £25k consider transferring to Halifax Share Dealing who are £12.50 pa plus £2 per reg trade so £36.50 pa which would be cheaper than Vanguard Investor 0.15% if you change to accumulation VWRP or hold Global All Cap.

[Deleted User]

Alexland said:

When the account gets to around £25k consider transferring to Halifax Share Dealing who are £12.50 pa plus £2 per reg trade so £36.50 pa which would be cheaper than Vanguard Investor 0.15% if you change to accumulation VWRP or hold Global All Cap.

Thanks. Am I reading it right that they don't seem to offer VWRP in an ISA? This link seems to suggest it's only 'Share dealing' allowed:
https://www.investments.halifax.co.uk/shares-centre/exchange-traded-fund/details/VWRP/IE00BK5BQT80/0P0001I3RZ

Versus the below which allows all 4:
https://www.investments.halifax.co.uk/shares-centre/exchange-traded-fund/details/VWRL/IE00B3RBWM25/0P0000WAHE

Thanks