Beginner - Navigating funds on HL

csgohan4

https://monevator.com/

Have a look at the above and read all the articles for passive investing. It helps you understand the fundamentals for investing, having your own strategy and picking your own platform. 

Remember, one man's meat is another man's poison.  One recommended fund may not be the best for you

Asghar

dizzeedollee said:

As I understand from my reading, the best options for a beginner are to invest in tracker funds following the FTSE 100, etc. Are these not multi-asset funds?

Yes, invest in tracker funds but not the FTSE 100, that's a terrible choice.

Look for a global tracker fund along the lines of the HSBC FTSE All-World Index.

dizzeedollee

ColdIron said:

ETFs generally (but again not always) track a simple index but you should always confirm by looking at the providers documentation. The KIID would probably be enough for that, but you should read the factsheet at a bare minimum before parting with your cash

However I feel you are doing this back to front. You should first determine which index or indexes you require to meet your objectives and only then go looking for the best vehicle for them, that could be an ETF or fund. ETFs have complexities that funds do not and unless you can identify a clear advantage they are probably best avoided at this stage

Most novices would be best served by a single fund (or fund of index funds). This could be one that tracks a single global index or a professionally built portfolio of several indexes. Do you have the knowledge to construct a portfolio of index trackers?

Edit: I may have misunderstood your question. ETFs are traded on an exchange so are usually listed quite separately from funds so there should be little chance of confusing the two

No worries, I very much appreciate your advice! I am still in the reading and researching phase so haven't made any investments yet. Currently, I'm comparing indexes as listed on Morning Star with those on individual brokers' wealth lists'.

dizzeedollee

csgohan4 said:

Have a look at the above and read all the articles for passive investing. It helps you understand the fundamentals for investing, having your own strategy and picking your own platform. 

Remember, one man's meat is another man's poison.  One recommended fund may not be the best for you

Hi csgohan4, that looks like a great guide. Thank you!

Asghar said:

dizzeedollee said:

As I understand from my reading, the best options for a beginner are to invest in tracker funds following the FTSE 100, etc. Are these not multi-asset funds?

Yes, invest in tracker funds but not the FTSE 100, that's a terrible choice.

Look for a global tracker fund along the lines of the HSBC FTSE All-World Index.

That was certainly one I was looking at. I was thinking of an example and the FTSE 100 was the first that sprung to mind!

DireEmblem

dizzeedollee said:

DireEmblem said:

Before you invest - why did you choose Hargreaves?  It might not be the best platform out there for your needs.

Hi DireEmblem, I haven't made a firm decision just yet but it seems the simplest (and cheapest!) option for a beginner. Many of the other brokers I've had a look at require more than £25 a month and as I'm just starting out, I would prefer to invest smaller monthly amounts initially.

dunstonh said:

If you are going to build a portfolio of tracker funds then you need to decide your investment strategy first along with your target allocation weightings. These things tend to be fluid over the economic cycle. So, you will need to understand when to make changes.     How is your knowledge on those things?   Or would you be better off with a multi-asset fund?

Hi dunstonh, in all honesty I'm not quite sure I've understood everything you've said there! As I understand from my reading, the best options for a beginner are to invest in tracker funds following the FTSE 100, etc. Are these not multi-asset funds?

Right ok.  Depending on what you would like to start with, have you considered Nutmeg?

They will tailor your investment based on your risk appetite.  For a £500 deposit, and £100 a month, for approx a year, they would give you a £100 bonus through quidco.  Essentially a 5.8% head start in your first year roughly speaking.

Alternatively for a new investor looking to achieve higher returns long term, invest in a cheap tracker/global fund.  Something like the Vanguard life strategy range are popular, direct from Vanguard you pay an annual 0.15% fee instead of the 0.45% I think you will pay with Hargreaves.

Alternatively, signup to Trading212 through a referral link, to get a free share worth up to £100(most likely £8), when you deposit £1, and look at VWRP.

dizzeedollee

DireEmblem said:

dizzeedollee said:

DireEmblem said:

Before you invest - why did you choose Hargreaves?  It might not be the best platform out there for your needs.

Hi DireEmblem, I haven't made a firm decision just yet but it seems the simplest (and cheapest!) option for a beginner. Many of the other brokers I've had a look at require more than £25 a month and as I'm just starting out, I would prefer to invest smaller monthly amounts initially.

dunstonh said:

If you are going to build a portfolio of tracker funds then you need to decide your investment strategy first along with your target allocation weightings. These things tend to be fluid over the economic cycle. So, you will need to understand when to make changes.     How is your knowledge on those things?   Or would you be better off with a multi-asset fund?

Hi dunstonh, in all honesty I'm not quite sure I've understood everything you've said there! As I understand from my reading, the best options for a beginner are to invest in tracker funds following the FTSE 100, etc. Are these not multi-asset funds?

Right ok.  Depending on what you would like to start with, have you considered Nutmeg?

They will tailor your investment based on your risk appetite.  For a £500 deposit, and £100 a month, for approx a year, they would give you a £100 bonus through quidco.  Essentially a 5.8% head start in your first year roughly speaking.

Alternatively for a new investor looking to achieve higher returns long term, invest in a cheap tracker/global fund.  Something like the Vanguard life strategy range are popular, direct from Vanguard you pay an annual 0.15% fee instead of the 0.45% I think you will pay with Hargreaves.

Alternatively, signup to Trading212 through a referral link, to get a free share worth up to £100(most likely £8), when you deposit £1, and look at VWRP.

Nutmeg is one I've had a look at but as I'm just starting out I didn't want to pay £100 on a monthly basis until I feel a bit more confident. What is your experience with Vanguard? It seems quite popular but TrustPilot seems to suggest that people have a lot of problems dealing with them?

ColdIron

Trustpilot would be close to the bottom of my list of places I would look to for financial recommendations

dunstonh

It seems quite popular but TrustPilot seems to suggest that people have a lot of problems dealing with them?

Never ever buy a financial product based on a trustpilot rating.   You could probably extend that to many other areas as well.

dizzeedollee

ColdIron said:

Trustpilot would be close to the bottom of my list of places I would look to for financial recommendations

As I'm sure you can tell, I'm the very cautious type and probably overly research in all the wrong places for reassurance!

green_man

AnotherJoe said:

Whats the big deal with ETFs? Why do "novices" need to  hold funds and not ETFs?

I guess it’s just that ETFs  can trade at changing premiums/discounts, can use gearing/ derivatives and the trading costs are usually more than for funds (on most/many platforms).?
However they do tend to be about the cheapest entry to index tracking, so as long as you read the docs and know what you are buying then I’ve got to say I prefer the definitive price you get with these and Investment trusts.