Help me splitting the money wisely - Lump sum + regular investing - which platform/fees

Alexland

HCIMbtw said:

Is it named after you?

Unexpectedly so following a chat I had with The Accumulator a month or two ago but I don't think it has an industry recognised name outside of the Monevator community. It really works if you want to stick with Vanguard funds such as their more keenly priced World tracker VEVE at 0.12% but the problem is that to include EM their All World or Global All Cap are just too expensive compared to the HSBC All World fund so on a lump sum it makes sense to switch but that undermines the platform saving from using the technique.

HCIMbtw said:

based on my contributions (£900pm) my horizon for any transfer is like 2.5 years minimum... and if OP is looking at contributing £500pm I expect theirs to be longer. In contrasts if I was in the position where I could put £2,000 into an ISA 10 months a year I would probably just do as you say and stick to iWeb as the one platform.

Even in this scenario Halifax Share Dealing would be cheaper at £12.50 + (£2 x £10) = £32.50 pa than iWeb at £25 setup then 10x £5 = £50 pa however it's hard to quantify the additional benefit of being able to do adhoc trades at £5 on iWeb rather than the very high HSD rate of £12.50. You need to be very disciplined on avoiding adhoc trades with HSD.

HCIMbtw

Alexland said:

HCIMbtw said:

Is it named after you?

Unexpectedly so following a chat I had with The Accumulator a month or two ago but I don't think it has an industry recognised name outside of the Monevator community. It really works if you want to stick with Vanguard funds such as their more keenly priced World tracker VEVE at 0.12% but the problem is that to include EM their All World or Global All Cap are just too expensive compared to the HSBC All World fund so on a lump sum it makes sense to switch but that undermines the platform saving from using the technique.

HCIMbtw said:

based on my contributions (£900pm) my horizon for any transfer is like 2.5 years minimum... and if OP is looking at contributing £500pm I expect theirs to be longer. In contrasts if I was in the position where I could put £2,000 into an ISA 10 months a year I would probably just do as you say and stick to iWeb as the one platform.

Even in this scenario Halifax Share Dealing would be cheaper at £12.50 + (£2 x £10) = £32.50 pa than iWeb at £25 setup then 10x £5 = £50 pa however it's hard to quantify the additional benefit of being able to do adhoc trades at £5 on iWeb rather than the very high HSD rate of £12.50. You need to be very disciplined on avoiding adhoc trades with HSD.

very disciplined.. or just keep it very simple with 1 fund and no re balancing required? I'm  pretty disciplined anyway and keep myself away from bothering to learn any more about diversification so there is nothing to rebalance.. albeit I haven't quite planned any tapering/cashing out strategy yet but that seems so far off.. i'll read about it in 15 years time

Don't know what you mean by EM by the way? 

grumiofoundation

Don't know what you mean by EM by the way? 

EM = Emerging Markets

Alexland

HCIMbtw said:

very disciplined.. or just keep it very simple with 1 fund and no re balancing required? I'm  pretty disciplined anyway and keep myself away from bothering to learn any more about diversification so there is nothing to rebalance.. albeit I haven't quite planned any tapering/cashing out strategy yet but that seems so far off.. i'll read about it in 15 years time

Exactly sticking to 1 accumulation fund per account (and leaving enough contribution uninvested each tax year to cover any ongoing fees so avoid selling down) is the best option on fixed price platforms with trade charges provided it's suitable for your circumstances. If you are still a long way off needing to derisk in prep for withdrawing any money and are happy with 100% equities risk then that works well. It also works well with a multi asset or target date fund if you are happy to take the additional costs.

Don't know what you mean by EM by the way? 

Emerging Markets - you end up paying almost twice the OCF on Vanguard funds to include the circa 10% EM with their All World ETF or Global All Cap fund when compared to their (developed) World ETF.

mustiuc

very very helpful what I could get from you guys thanks for your replies/answers.
I will be back on this thread in a couple of days after I decide 100% what funds/trackers I would follow and ask for your opinion again.
I will also decide of I will stick with one platform and use lump + regular for less hassle and peace of mind or use two platforms to limit the number of funds/transactions. I mean... I will not trade/sell/etc.. on the other side.. platforms will change from time to time their fees and charges - so what is cheap today it might not be cheap tomorrow.
I would have two more questions for you:
 -  from what I've read/researched, if I invest in a fund with it's location in Ireland/Luxembourg/Malta/etc and goes bust, is not protected by FSCS due to it's location - right?
 - investing being for long term, what will happen if, let's say, the fund manager decides to close/etc the fund and I am not aware of that or miss the news? what will happen with the fund/monies invested/etc ?

thanks again.

Alexland

mustiuc said:

 -  from what I've read/researched, if I invest in a fund with it's location in Ireland/Luxembourg/Malta/etc and goes bust, is not protected by FSCS due to it's location - right?

Compensation schemes will vary by country but in Europe are usually set around the €100k level similar to FSCS but there are plenty of good UK domiciled OEIC funds. You will often find ETFs are based in Europe but that type of investment wouldn't have FSCS protection anyway. I believe the history of there not being many UK based ETFs is because the government once tried to get stamp duty for trading them.

mustiuc said:

 - investing being for long term, what will happen if, let's say, the fund manager decides to close/etc the fund and I am not aware of that or miss the news? what will happen with the fund/monies invested/etc ?

Fund managers will often merge underperforming funds into other funds to retain the volume of assets under management. If they do close the investment the money would he returned to your account but you would be keeping an eye on your investments, right?

george4064

Alexland said:

mustiuc said:

 -  from what I've read/researched, if I invest in a fund with it's location in Ireland/Luxembourg/Malta/etc and goes bust, is not protected by FSCS due to it's location - right?

Compensation schemes will vary by country but in Europe are usually set around the €100k level similar to FSCS but there are plenty of good UK domiciled OEIC funds. You will often find ETFs are based in Europe but that type of investment wouldn't have FSCS protection anyway. I believe the history of there not being many UK based ETFs is because the government once tried to get stamp duty for trading them.

mustiuc said:

 - investing being for long term, what will happen if, let's say, the fund manager decides to close/etc the fund and I am not aware of that or miss the news? what will happen with the fund/monies invested/etc ?

Fund managers will often merge underperforming funds into other funds to retain the volume of assets under management. If they do close the investment the money would he returned to your account but you would be keeping an eye on your investments, right?

Most London listed ETFs are Irish domiciled and hence bypass any UK law for stamp duty anyway, but there are probably other tax benefits too. Easiest way to find out is to look at the first two characters in the ISIN, eg for HMWO ETF it’s ISIN is IE00B4X9L533

Alexland

george4064 said:
Most London listed ETFs are Irish domiciled and hence bypass any UK law for stamp duty anyway, but there are probably other tax benefits too. Easiest way to find out is to look at the first two characters in the ISIN, eg for HMWO ETF it’s ISIN is IE00B4X9L533

Yes that's because the UK government previously tried to get stamp duty on UK domiciled ETFs so the fund managers setup in other EU countries. They gave up on that 6 years ago but it was too late.
https://www.etfstrategy.com/etf-industry-experts-welcome-abolition-of-stamp-duty-on-uk-exchange-traded-funds-etfs-71253/
"In his Autumn statement Chancellor George Osborne has announced that from April 2014 the UK government will remove the stamp duty and stamp duty reserve tax (SDRT) charge on purchases of shares in exchange-traded funds (ETFs) that would currently apply if an ETF were domiciled in the UK."

george4064

Alexland said:

george4064 said:
Most London listed ETFs are Irish domiciled and hence bypass any UK law for stamp duty anyway, but there are probably other tax benefits too. Easiest way to find out is to look at the first two characters in the ISIN, eg for HMWO ETF it’s ISIN is IE00B4X9L533

Yes that's because the UK government previously tried to get stamp duty on UK domiciled ETFs so the fund managers setup in other EU countries. They gave up on that 6 years ago but it was too late.
https://www.etfstrategy.com/etf-industry-experts-welcome-abolition-of-stamp-duty-on-uk-exchange-traded-funds-etfs-71253/
"In his Autumn statement Chancellor George Osborne has announced that from April 2014 the UK government will remove the stamp duty and stamp duty reserve tax (SDRT) charge on purchases of shares in exchange-traded funds (ETFs) that would currently apply if an ETF were domiciled in the UK."

Thanks for sharing, I never knew about all this history around ETFs and stamp duty. 

mustiuc

Alex seems to have quite some knowledge. Good to have him around
I sat last night till 4am to check/compare platforms/fees and funds. I reached a conclusion late in the morning that I never thought I will agree with.