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Ethical S&S ISA advice please
Blackavar
Posts: 211 Forumite
Hi.
I have a colleague, late 20's who is looking to grow 10K over time better than the current bank rates. He's had this cash in a guaranteed bond and the current rate to reinvest for a year is 1.17%. I have gone to great lengths to explain the risk aspect and the ongoing potential anxiety but he wants to invest this into an ethical fund.
I am not 'advising' as not qualified to do this so just offering information.
My suggestion would be to look at funds: Vanguard ESG Developed world and Fundsmith Sustanable equity T. These seem to tick his boxes although the latter has larger fees. I will also suggest that as a new investor, he feeds this in maybe 2K per month just to get used to it. I would also suggest a low cost platform Iweb that I use myself which although basic, is adequate for low investment activity.
I just need a sanity check that this may be the way to go for him?
I have a colleague, late 20's who is looking to grow 10K over time better than the current bank rates. He's had this cash in a guaranteed bond and the current rate to reinvest for a year is 1.17%. I have gone to great lengths to explain the risk aspect and the ongoing potential anxiety but he wants to invest this into an ethical fund.
I am not 'advising' as not qualified to do this so just offering information.
My suggestion would be to look at funds: Vanguard ESG Developed world and Fundsmith Sustanable equity T. These seem to tick his boxes although the latter has larger fees. I will also suggest that as a new investor, he feeds this in maybe 2K per month just to get used to it. I would also suggest a low cost platform Iweb that I use myself which although basic, is adequate for low investment activity.
I just need a sanity check that this may be the way to go for him?
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Comments
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iWeb is £5 per trade?
Therefore if he feeds in £2000 per month thats will be £25 fees per year - 2.5% - which is high. (£50 -5% in first year).
He would be better with a % based fee system for this amount of money.
See comment below.
What length of time? - if 20 years seems sensible to go 100% equity.Blackavar said:I have a colleague, late 20's who is looking to grow 10K over time better than the current bank rates. He's had this cash in a guaranteed bond and the current rate to reinvest for a year is 1.17%. I have gone to great lengths to explain the risk aspect and the ongoing potential anxiety but he wants to invest this into an ethical fund.
If 2 years investing at all is pretty risky.0 -
You are out by a factor of ten on the maths - perhaps a decimal point in the wrong place.grumiofoundation said:iWeb is £5 per trade?
Therefore if he feeds in £2000 per month thats will be £25 fees per year - 2.5% - which is high. (£50 -5% in first year).
He would be better with a % based fee system for this amount of money.
Assuming he invests £2000 each month into one fund each month (if he wants two funds, perhaps alternating which fund he invests in from month to month until all his money is invested), the fee of £5 for investing each £2000 (or £25 for the whole £10,000) would be 0.25% in year one; and the fee on that £10,000 would be zero in year two, three, four etc because the money has already been invested.
So, a system that charges a platform fee of an ongoing percentage of the total account balance each year is unlikely to be a lot cheaper, because most places doing that are 0.15-0.3% every year and some are a lot more.
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Yeesh - thats bad maths by me!bowlhead99 said:
You are out by a factor of ten on the maths - perhaps a decimal point in the wrong place.grumiofoundation said:iWeb is £5 per trade?
Therefore if he feeds in £2000 per month thats will be £25 fees per year - 2.5% - which is high. (£50 -5% in first year).
He would be better with a % based fee system for this amount of money.
Assuming he invests £2000 each month into one fund each month (if he wants two funds, perhaps alternating which fund he invests in from month to month until all his money is invested), the fee of £5 for investing each £2000 (or £25 for the whole £10,000) would be 0.25% in year one; and the fee on that £10,000 would be zero in year two, three, four etc because the money has already been invested.
So, a system that charges a platform fee of an ongoing percentage of the total account balance each year is unlikely to be a lot cheaper, because most places doing that are 0.15-0.3% every year and some are a lot more.
Shouldn't have stayed up to watch the American football!0 -
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If he wants to use Vanguard and the amount invested will be modest he might consider their ISA?
https://moneytothemasses.com/saving-for-your-future/investing/vanguard-investor-uk-review-is-it-the-best-in-the-market
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Thanks but I think it’s a bit cheaper holding the Vanguard fund on IWeb due to ongoing annual charges with Vanguard direct as opposed to the one off fixed costs with iWeb. Thanks for the link though - some interesting info there.xylophone said:If he wants to use Vanguard and the amount invested will be modest he might consider their ISA?
https://moneytothemasses.com/saving-for-your-future/investing/vanguard-investor-uk-review-is-it-the-best-in-the-market
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Passive funds aren't that ethical. If you really want to invest ethically you should consider active funds.
No one has ever become poor by giving0 -
there are plenty of ethical indexes tracked by funds e.g.:thegentleway said:Passive funds aren't that ethical. If you really want to invest ethically you should consider active funds.
Vanguard ESG Developed World All Cap Equity Index Fund which tracks the FTSE Developed All Cap ex Controversies/Non-Renewable Energy/Vice Products/Weapons Index; or
iShares MSCI World ESG Enhanced UCITS ETF USD which tracks the MSCI World ESG Enhanced Focus NET Index
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Did you notice who wrote this 'opinion' article ? The Cambodian opposition leader in exile in Paris, so I suspect it is not 100% factually correct.....colsten said:0
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