2 pots to invest into ETF's

wolves1976

following discussions with FA last week and weeks of research and tail chasing (understanding).

items i am going to action first is SIPP

SIPP is my largest pension, i have 3 others with other providers which i will leave alone this year.

SIPP is currently in cash with Fidelity.

my thoughts are based on advice/what feels less complicated.

 My thoughts are

88% into one fund

Fund of choice is HSBC FTSE All-World Index Fund Accumulation C

0.13 otf with platform cost capped at £45 for this one fund/others like it.

it holds 3179 holdings and has 9.68% Emerging Markets.

i will add Bonds to my SIPP over short term after locking away my 88%

I think  that i will open another SIPP in the future on another platform where i will take on further knowledge in this field and create a profile that suit me then/ change up allocation, add more or less bonds/equites to it etc.

I sometime get the view when i read on forums that people think that they only have once chance to get it right first time, which isnt the case, but planning on what you want to achieve/sense of your direction helps close down the vast list of choices.

 achievements for this SIPP, take this high risk to enable maximum growth for 11 years, then i want to taper it down, i see this SIPP as tax saving vehicle really, it will sit alongside my other assets and makeup 30% of retirement fund/kids inheritance.

plan not to add to this SIPP for this year and put into other pension pots/ISA's - want to lock this away.

Q1: any views on the HSBC FTSE All-World Index Fund Accumulation C fund as core

such as, do you use it, happy with it, would change it for something else,

Q2: would you feed in the money over days/weeks or just a big bang.   

time invested starts from day 1 when its all invested, 2020 has been a unique year and the ups and downs are still coming fast and thick. ( this is first time i am doing this, once i am in the market a year or so, i will remove my emotional state further and forget about the news)

Q3: do many readers here have a simple two fund portfolio/would they change it up if they had time to redo it.

Alexland

I thought we were talking about that fund for use in your iWeb ISA? You won't get capped charges at Fidelity for holding a fund it would need to be an ETF, etc.

wolves1976

Alexland said:

I thought we were talking about that fund for use in your iWeb ISA? You won't get capped charges at Fidelity for holding a fund it would need to be an ETF, etc.

this fund i will hold in both SIPP and ISA. easier to work with SIPP as its in the right account, ISA could take weeks to transfer.
i called feditity today and tested platform.  when i went to test buy £10,000 it showed no costs to buy, advisor also stated that since its traded once a day it has not trading cost.
what costs do you think it should be?

bowlhead99

wolves1976 said:

Alexland said:

I thought we were talking about that fund for use in your iWeb ISA? You won't get capped charges at Fidelity for holding a fund it would need to be an ETF, etc.

this fund i will hold in both SIPP and ISA. easier to work with SIPP as its in the right account, ISA could take weeks to transfer.
i called feditity today and tested platform.  when i went to test buy £10,000 it showed no costs to buy, advisor also stated that since its traded once a day it has not trading cost.
what costs do you think it should be?

There is no cost to 'trade' it because they don't need to broker a deal for you in real time on the stock exchange with another willing participant, as it does not trade on a stock exchange.

It is an open ended fund and through Fidelity's platform you can place requests to subscribe for new units or redeem out of the units you hold; so instead of needing to 'trade' it, Fidelity will simply pass your instruction on to the fund manager of the fund to meet the once-a-day subscription/redemption request cut-off point, and will act as an intermediary to administer your participation in the fund and maintain your position through their investment platform.

For this service, they charge you an ongoing service fee of 0.35% a year (https://www.fidelity.co.uk/services/sipp/fees-and-charges/#tab-link ) which would be £35 a year on your £10,000 'test buy'.

The service fee is capped at £45 a year for exchange-traded instruments which attract dealing fees/ trading costs. The HSBC FTSE All-World Index Fund Accumulation C fund you are talking about is an open-ended investment company and not an exchange traded share,  - so doesn't attract a dealing fee or benefit from the annual cap on the platform service fee.

wolves1976

The same service fee is charged across all of your investments. So, if you hold £300,000 - the fee would be 0.20% across the full amount. For exchange-traded instruments, this portion of the fee is capped at £45 and there is no service fee for these investments when held in the Fidelity Investment Account. 
so this part in bold covers off just ETF part of charge.  

Q1: is there any part of the key stats for the fund that details platform costs ?  or is it the blanket charge of £45
Q2:  i see this text and read it as capped.  (https://www.fidelity.co.uk/services/charges-fees/fees-more-detail/#tab-link)

• The portion of the fee you pay on exchange-traded investments (shares, exchange-traded funds (ETFs), etc.) within an ISA or SIPP is capped at £45.

bowlhead99

wolves1976 said:

The same service fee is charged across all of your investments. So, if you hold £300,000 - the fee would be 0.20% across the full amount. For exchange-traded instruments, this portion of the fee is capped at £45 and there is no service fee for these investments when held in the Fidelity Investment Account. 
so this part in bold covers off just ETF part of charge.  

Q1: is there any part of the key stats for the fund that details platform costs ?  or is it the blanket charge of £45
Q2:  i see this text and read it as capped.  (https://www.fidelity.co.uk/services/charges-fees/fees-more-detail/#tab-link)

• The portion of the fee you pay on exchange-traded investments (shares, exchange-traded funds (ETFs), etc.) within an ISA or SIPP is capped at £45.

The page literally has a huge table in the middle of it telling you what the service fee is. 

• Less than £7,500: 0.35% if you have a regular savings plan or £45 if you don't

• £7,500 or more but less than £250,000: 0.35%

• £250,000 or more but less than £1 million: 0.20% - and you will automatically qualify for the Fidelity Wealth Service benefits.

So, that is the platform costs.
It shows a tiered fee and says that if you have a lot of assets with them they would all qualify for the cheaper fees. In other words you don't pay 0.35% on the first £250k and 0.20% on the next £250k; instead, if you have £300k or £500k or £700k etc the whole lot would qualify for the lower 0.20% fee. 
As you mention twice, and as others have mentioned, which is why you were looking at Fidelity in the first place:  For exchange-traded instruments, this portion of the fee is capped at £45.

The portion of your holdings that is not invested in exchange traded instruments such as shares and ETFs, and is instead invested in open-ended funds such as HSBC FTSE All-World Index Fund Accumulation C, will not be capped at £45 and will incur the relevant service fee percentage from the table shown.

So if you have £150k of investments in your SIPP, of which £100k are open ended investment funds such as HSBC  FTSE All-World Index Fund Accumulation C,  and £50k are exchange traded funds, you would pay your full 0.35% on the £100k of open ended funds (£350) and you would pay 0.35% capped at £45 on the ETFs (£45).

To your questions:

Q1: is there any part of the key stats for the fund that details platform costs ?  or is it the blanket charge of £45

The factsheet or the key information document for the fund provided by Fidelity (e.g. https://www.fidelity.co.uk/factsheet-data/factsheet/GB00BMJJJG09-hsbc-ftse-all-world-index-c-inc/charges-and-key-documents ) or the one provided by the fund manager (e.g. https://www.fundslibrary.co.uk/FundsLibrary.DataRetrieval/Documents.aspx?type=packet_fund_class_doc_factsheet_private&id=ac05b61a-f599-48e9-8e30-d8d52f2b718a&user=fidelitydocumentreport) does not detail the platform costs because the platform costs depend on how much money you have on the platform using that 'service fee' table discussed above (e.g. 0.20% or 0.35%) 

The cap is at £45 only on exchange traded instruments, which is not relevant to HSBC  FTSE All-World Index Fund Accumulation C which is an open ended fund (OEIC) and not an exchange-traded fund (ETF)

Q2:  i see this text and read it as capped.  (https://www.fidelity.co.uk/services/charges-fees/fees-more-detail/#tab-link)

The link is quite clear that only "For exchange-traded instruments, this portion of the fee is capped at £45". For the portion of your investments which are other investment types which are not traded on a stock exchange, the fee is not capped until you get to a million.

wolves1976

i cant believe i spoke to Fidelity and asked this question and then WE did a test on the phone (i didn't accept the terms so i was nulled but still showed charges.)  
so VEVE or VWRL will be capped
also when i am testing now on veve is shows cost to trade as £10.  is this due to the market being closed.

bowlhead99

wolves1976 said:

so VEVE or VWRL will be capped
also when i am testing now on veve is shows cost to trade as £10.  is this due to the market being closed.

In your post above you literally pointed us to the fees page at (https://www.fidelity.co.uk/services/charges-fees/fees-more-detail/#tab-link)
which said:

Share dealing and other charges

• There is a charge made for each buy and sell transaction you place (including switches and dividend reinvestments). This will be deducted from the amount invested or raised through a sale.

• £1.50 for deals as part of a regular savings or withdrawal plan, or for a reinvestment of income or a dividend.

• Simple charge of £10.00 for each deal placed online

• Phone trades are charged £30.00 for each deal.

So, if you are testing the making of a deal to buy a share of VEVE, and it shows cost to trade as £10, that sounds right.

The charge to place a deal to buy a share of VEVE  on the stockmarket is £10, but the reason it is £10 is not "due to the market being closed".   The reason the charge to place a deal to buy VEVE on the stock market is £10 is "due to the simple charge of £10.00 for each deal placed online"

wolves1976

@bowlhead99, got it  - stop sharking your head :-)
the £45 pa fee i thought included the £10 share dealing fee/was not share dealing fee  - too used to vanguard platform.
off to bed, sorry for making your hand hurt typing above back - helped me and should help some others also.

csgohan4

can i just check ETI are ETF's, ETCs and IT's? does it include shares as Bowelhead says???