S&S LISA - fund/tracker options

noclaf

Alexland said:

noclaf said:

The HSBC fund you suggested seems (to me at least) a good complement to my VLS due to the different regional weightings and reasonably priced. I looked at some of the L&G funds but they were much pricier.

Just be aware that AJ Bell don't cap their 0.25% fee on funds only exchange traded assets such as ETFs, ITs or Shares. Still if you are happy with that, and many people are, then maybe I should buy some AJ Bell shares....

Is it not 0.25% upto 250k for funds?

Alexland

noclaf said:

Is it not 0.25% upto 250k for funds?

On funds in the AJ Bell S&S ISA they reduce to 0.10% for anything above £250k, 0.05% for anything above £1m then nothing for above £2m however this is not mentioned on the equivilent charges webpage (or downloadable PDF) for their LISA just a flat 0.25% charge.

https://www.youinvest.co.uk/isa/charges-and-rates

https://www.youinvest.co.uk/lifetime-isa/charges-and-rates

Still even if they did cap at £250k then do you really want to be paying £625 pa in platform fees when they could be capped at £30 pa for an ETF? Given the £4k pa annual contribution limit it won't get that high for a while and ours are still only 10% of that valuation.

noclaf

Alexland said:

noclaf said:

Is it not 0.25% upto 250k for funds?

On funds in the AJ Bell S&S ISA they reduce to 0.10% for anything above £250k, 0.05% for anything above £1m then nothing for above £2m however this is not mentioned on the equivilent charges webpage (or downloadable PDF) for their LISA just a flat 0.25% charge.

https://www.youinvest.co.uk/isa/charges-and-rates

https://www.youinvest.co.uk/lifetime-isa/charges-and-rates

Still even if they did cap at £250k then do you really want to be paying £625 pa in platform fees when they could be capped at £30 pa for an ETF? Given the £4k pa annual contribution limit it won't get that high for a while and ours are still only 10% of that valuation.

Ah of course...this is the LISA and not the standard S&S ISA.
It would take quite a few years of consistent investing and decent gains to get to £250k given the £4k annual limit so I may just take a risk with the fund.....but let's say for example I have £100k investment in 10 years in the LISA....ETF would still be £30 whilst the fund would be £250 I think? The question then is whether the FSCS protection for a fund upto £84k is more important than saving on fees....if it's a long term hold then fees should be the main focus I guess?

Alexland

noclaf said:

It would take quite a few years of consistent investing and decent gains to get to £250k given the £4k annual limit so I may just take a risk with the fund.....

Cool thanks for confirming I will get on with buying those AJ Bell shares...

noclaf

Alexland said:

noclaf said:

It would take quite a few years of consistent investing and decent gains to get to £250k given the £4k annual limit so I may just take a risk with the fund.....

Cool thanks for confirming I will get on with buying those AJ Bell shares...

I'm a generous guy
Out of interest how often have you chopped and changed funds or etf's completely across any of your platforms/tax wrappers? I'm curious to know if for example you invested in a particular fund or etf for a few years and then completely sold out and reinvested into a different fund? (Maybe due to performance reasons or anything else)

Nuggy96

I'm not up to speed with all the terminologies of investment, so if I were to transfer a 20K  LISA to AJ Bell and invest in VLS80 or HSBC FTSE All World fund. Would the fee by 0.25% with no limit or 0.25% with a £30 limit?  Not sure what category they fall under for AJ bell. 

Annual shares custody charge (including investment trusts, ETFs, gilts and bonds)

0.25%of the value of the shares in your account

Maximum £7.50 per quarter

Annual funds custody charge (including unit trusts, OEICs and structured products)

0.25%

ColdIron

Those 2 funds are unit trusts/OEICs and not investment trusts, ETFs, gilts or bonds so the cap would not apply

Nuggy96

ColdIron said:

Those 2 funds are unit trusts/OEICs and not investment trusts, ETFs, gilts or bonds so the cap would not apply

Ahh ok, great thanks, so probably not the best thing if wanting to keep costs low.
In terms of looking at good ETFs for a S&S LISA, what's a good recommendation? I am looking at potentially The Vanguard FTSE All-World ETF? Any ideas?

Alexland

noclaf said:

Out of interest how often have you chopped and changed funds or etf's completely across any of your platforms/tax wrappers? I'm curious to know if for example you invested in a particular fund or etf for a few years and then completely sold out and reinvested into a different fund? (Maybe due to performance reasons or anything else)

The investment market is constantly changing and fund and platform prices have reduced substantially in the past 20 years so a certain amount of change is necessary as better options and combinations appear. You learn from experience, talking to others plus your circumstances and objectives change as you progress through life events. I started around 20 years ago with a passive fund that tracked the FTSE100 (which seemed a reasonable index at the time) but then went to the dark side about 10 years ago dabbling with company shares both individually and within a small share club before moving on to active funds and then back full circle to realise that I was most comfortable with low cost passive investing. There was a lightbulb moment when I realised it's not about chasing returns but maximising the probability of achieving your objectives. Others have been on different journeys and reached different conclusions.

Alexland

Nuggy96 said:

I'm not up to speed with all the terminologies of investment, so if I were to transfer a 20K  LISA to AJ Bell and invest in VLS80 or HSBC FTSE All World fund. Would the fee by 0.25% with no limit or 0.25% with a £30 limit?  Not sure what category they fall under for AJ bell. 

Those are both traditional OEIC funds so AJ Bell would have no limit on their 0.25% platform charge and it would cost £1.50 per trade. AJ Bell's LISA capping only applies to ETFs, ITs and individual company shares (and gilts and bonds but it's really unlikely you would buy those directly). If you bought those OEIC funds in an EQi LISA then their charge would be 0.20% capped at £40 pa with no fund trading charge.