Switching from Vanguard LS to ETFs on Fidelity

MDMD

I’m currently using Fidelity to hold my SIPP, which is mainly in Vanguard LS 100 (with a few ETFs such as Scottish Mortgage and Smithson on the side)

However, the fund is now around £100k which means I am paying around £350 pa just in account fees so I was looking at switching into a low cost world ETF to benefit from the Fidelity £45 fee cap on ETFs. Even accounting for the £10 dealing cost I should end up coming out on top.

I was considering the HSBC All world ETF rather than spreading over a number of funds which would cost more and just duplicate things. Looks like around 19% is in tech stocks which might duplicate with the SMT holding?

https://www.etf.hsbc.com/etf/attachments/uk/factsheet_world_retail.pdf

I am HR taxpayer with at least 30 years to
go, so should I be doing something more adventurous? I’m willing to take some bigger risks with part of the portfolio.

I also have a workplace pension with another £100k in (again with Fidelity) but this is quite cheap and I can pay in through SS, so any costs are easily outweighed by the tax benefits. The funds are restricted to a particular set so I’m going to leave this for now.

Alexland

MDMD said:

I was considering the HSBC All world ETF rather than spreading over a number of funds which would cost more and just duplicate things. Looks like around 19% is in tech stocks which might duplicate with the SMT holding?

https://www.etf.hsbc.com/etf/attachments/uk/factsheet_world_retail.pdf

HMWO is a World, not All World ETF, so no EM exposure. That's not to say it will be a bad investment (my wife's Fidelity SIPP is entirely invested in HMWO) just remember that if you want 10% EM you would have to get it elsewhere (perhaps via your workplace pension?). You might also want to consider the slightly cheaper Vanguard VEVE which I hold in my Fidelity SIPP. They are both quarterly distributing ETFs so remember to setup the automatic £1.50 reinvestment to avoid paying any ongoing £10 trade charges. Overall the platform fees should be £45 + (4 x £1.50) = £51 pa and you would also save on the fund management fees compared to VLS. However you would miss out on any rebound on the UK bias if there is a generally acceptable Brexit deal. It was a nice feeling during the crash earlier this year to know that heavy fees were not nibbling away at our investments while they were low.

MDMD said:

I am HR taxpayer with at least 30 years to go

Can you put enough into the pension to get down the basic rate? Particularly beneficial if you have children for claiming child benefit. If you are making heavy contributions to get down to basic rate then consider a 6 months low / 6 months high contribution strategy which basically enables you to save 12% NI on some of your 40% higher rate contributions so a bit more money in your bank account to spend or stick into ISAs...

MDMD said:

I also have a workplace pension with another £100k in (again with Fidelity) but this is quite cheap and I can pay in through SS, so any costs are easily outweighed by the tax benefits. The funds are restricted to a particular set so I’m going to leave this for now.

Depending on the rules of your scheme you may be able to do partial lump sum transfers while remaining a contributing member. When we had Fidelity workplace pensions the scheme rules allowed us to transfer up to 90% out and it was very quick going between Fidelity accounts. We stopped transferring now that our Fidelity accounts are pretty big so are just letting the new money build up in our new workplace pensions for now. As above it's a handy place to hold EM exposure, bonds and rebalance without any trade fees to worry about.

ColdIron

Scottish Mortgage and Smithson are investment trusts and not ETFs, although they will be charged in a similar way

Albermarle

I am HR taxpayer with at least 30 years to
go, so should I be doing something more adventurous? I’m willing to take some bigger risks with part of the portfolio.

The fact you are a HR taxpayer has no bearing on what investment risks you should take .

This is largely defined by your age and your risk tolerance .

In any case your current investments are at the higher end of the risk spectrum anyway .( 100% equities )

Another_Saver

MDMD said:

I’m currently using Fidelity to hold my SIPP, which is mainly in Vanguard LS 100 (with a few ETFs such as Scottish Mortgage and Smithson on the side)

However, the fund is now around £100k which means I am paying around £350 pa just in account fees so I was looking at switching into a low cost world ETF to benefit from the Fidelity £45 fee cap on ETFs. Even accounting for the £10 dealing cost I should end up coming out on top.

I was considering the HSBC All world ETF rather than spreading over a number of funds which would cost more and just duplicate things. Looks like around 19% is in tech stocks which might duplicate with the SMT holding?

https://www.etf.hsbc.com/etf/attachments/uk/factsheet_world_retail.pdf

I am HR taxpayer with at least 30 years to
go, so should I be doing something more adventurous? I’m willing to take some bigger risks with part of the portfolio.

I also have a workplace pension with another £100k in (again with Fidelity) but this is quite cheap and I can pay in through SS, so any costs are easily outweighed by the tax benefits. The funds are restricted to a particular set so I’m going to leave this for now.

You're already 100% in equities, which is entirely appropriate given your timeframe. That's all the risk you need.

SMT and Smithson are both fine. I'm sceptical about SMT's ridiculous run continuing, it has occured entirely in the last decade prior to which is was just average.
There will always be duplication if you hold anything alongside an all world index fund, that is why I only use index funds, but if you like or believe in anything else you're more than welcome to hold it.

A_T

Another_Saver said:

MDMD said:

I’m currently using Fidelity to hold my SIPP, which is mainly in Vanguard LS 100 (with a few ETFs such as Scottish Mortgage and Smithson on the side)

However, the fund is now around £100k which means I am paying around £350 pa just in account fees so I was looking at switching into a low cost world ETF to benefit from the Fidelity £45 fee cap on ETFs. Even accounting for the £10 dealing cost I should end up coming out on top.

I was considering the HSBC All world ETF rather than spreading over a number of funds which would cost more and just duplicate things. Looks like around 19% is in tech stocks which might duplicate with the SMT holding?

https://www.etf.hsbc.com/etf/attachments/uk/factsheet_world_retail.pdf

I am HR taxpayer with at least 30 years to
go, so should I be doing something more adventurous? I’m willing to take some bigger risks with part of the portfolio.

I also have a workplace pension with another £100k in (again with Fidelity) but this is quite cheap and I can pay in through SS, so any costs are easily outweighed by the tax benefits. The funds are restricted to a particular set so I’m going to leave this for now.

You're already 100% in equities, which is entirely appropriate given your timeframe. That's all the risk you need.

SMT and Smithson are both fine. I'm sceptical about SMT's ridiculous run continuing, it has occured entirely in the last decade prior to which is was just average.
There will always be duplication if you hold anything alongside an all world index fund, that is why I only use index funds, but if you like or believe in anything else you're more than welcome to hold it.

actually between the dot.com and credit crunch crashes SMT was one the best performing global equity ITs

Another_Saver

A_T said:

Another_Saver said:

MDMD said:

I’m currently using Fidelity to hold my SIPP, which is mainly in Vanguard LS 100 (with a few ETFs such as Scottish Mortgage and Smithson on the side)

However, the fund is now around £100k which means I am paying around £350 pa just in account fees so I was looking at switching into a low cost world ETF to benefit from the Fidelity £45 fee cap on ETFs. Even accounting for the £10 dealing cost I should end up coming out on top.

I was considering the HSBC All world ETF rather than spreading over a number of funds which would cost more and just duplicate things. Looks like around 19% is in tech stocks which might duplicate with the SMT holding?

https://www.etf.hsbc.com/etf/attachments/uk/factsheet_world_retail.pdf

I am HR taxpayer with at least 30 years to
go, so should I be doing something more adventurous? I’m willing to take some bigger risks with part of the portfolio.

I also have a workplace pension with another £100k in (again with Fidelity) but this is quite cheap and I can pay in through SS, so any costs are easily outweighed by the tax benefits. The funds are restricted to a particular set so I’m going to leave this for now.

You're already 100% in equities, which is entirely appropriate given your timeframe. That's all the risk you need.

SMT and Smithson are both fine. I'm sceptical about SMT's ridiculous run continuing, it has occured entirely in the last decade prior to which is was just average.
There will always be duplication if you hold anything alongside an all world index fund, that is why I only use index funds, but if you like or believe in anything else you're more than welcome to hold it.

actually between the dot.com and credit crunch crashes SMT was one the best performing global equity ITs

...
I've just gone on trustnet and compared it with FTSE all share and FTSE world, data goes back to 1995. Until 2010 it looks average, when it's really taken off was in the 2010s.

TBC15

I think if you buy your ETFs on a regular monthly basis you should get your trades at £1.50

MDMD

Alexland said:

MDMD said:

I was considering the HSBC All world ETF rather than spreading over a number of funds which would cost more and just duplicate things. Looks like around 19% is in tech stocks which might duplicate with the SMT holding?

https://www.etf.hsbc.com/etf/attachments/uk/factsheet_world_retail.pdf

HMWO is a World, not All World ETF, so no EM exposure. That's not to say it will be a bad investment (my wife's Fidelity SIPP is entirely invested in HMWO) just remember that if you want 10% EM you would have to get it elsewhere (perhaps via your workplace pension?). You might also want to consider the slightly cheaper Vanguard VEVE which I hold in my Fidelity SIPP. They are both quarterly distributing ETFs so remember to setup the automatic £1.50 reinvestment to avoid paying any ongoing £10 trade charges. Overall the platform fees should be £45 + (4 x £1.50) = £51 pa and you would also save on the fund management fees compared to VLS. However you would miss out on any rebound on the UK bias if there is a generally acceptable Brexit deal. It was a nice feeling during the crash earlier this year to know that heavy fees were not nibbling away at our investments while they were low.

MDMD said:

I am HR taxpayer with at least 30 years to go

Can you put enough into the pension to get down the basic rate? Particularly beneficial if you have children for claiming child benefit. If you are making heavy contributions to get down to basic rate then consider a 6 months low / 6 months high contribution strategy which basically enables you to save 12% NI on some of your 40% higher rate contributions so a bit more money in your bank account to spend or stick into ISAs...

MDMD said:

I also have a workplace pension with another £100k in (again with Fidelity) but this is quite cheap and I can pay in through SS, so any costs are easily outweighed by the tax benefits. The funds are restricted to a particular set so I’m going to leave this for now.

Depending on the rules of your scheme you may be able to do partial lump sum transfers while remaining a contributing member. When we had Fidelity workplace pensions the scheme rules allowed us to transfer up to 90% out and it was very quick going between Fidelity accounts. We stopped transferring now that our Fidelity accounts are pretty big so are just letting the new money build up in our new workplace pensions for now. As above it's a handy place to hold EM exposure, bonds and rebalance without any trade fees to worry about.

Thanks for all this - yes, I’ve got some EM exposure via the workplace pension. 

 I say I am HR but for the past 5 years as you suggest above I have been sacrificing down to the BR, but concentrated in the last three or four months of the tax year (rather than six) and reduce my pay to minimum wage.

I will investigate transferring between the schemes though, but dealing with the SIPP charges is the priority.

MDMD

Another_Saver said:

MDMD said:

I’m currently using Fidelity to hold my SIPP, which is mainly in Vanguard LS 100 (with a few ETFs such as Scottish Mortgage and Smithson on the side)

However, the fund is now around £100k which means I am paying around £350 pa just in account fees so I was looking at switching into a low cost world ETF to benefit from the Fidelity £45 fee cap on ETFs. Even accounting for the £10 dealing cost I should end up coming out on top.

I was considering the HSBC All world ETF rather than spreading over a number of funds which would cost more and just duplicate things. Looks like around 19% is in tech stocks which might duplicate with the SMT holding?

https://www.etf.hsbc.com/etf/attachments/uk/factsheet_world_retail.pdf

I am HR taxpayer with at least 30 years to
go, so should I be doing something more adventurous? I’m willing to take some bigger risks with part of the portfolio.

I also have a workplace pension with another £100k in (again with Fidelity) but this is quite cheap and I can pay in through SS, so any costs are easily outweighed by the tax benefits. The funds are restricted to a particular set so I’m going to leave this for now.

You're already 100% in equities, which is entirely appropriate given your timeframe. That's all the risk you need.

SMT and Smithson are both fine. I'm sceptical about SMT's ridiculous run continuing, it has occured entirely in the last decade prior to which is was just average.
There will always be duplication if you hold anything alongside an all world index fund, that is why I only use index funds, but if you like or believe in anything else you're more than welcome to hold it.

Yes, I’m debating whether to take some profits as it now accounts for 5% of my holding. 

Herbalus

What’s the benefit of concentrating the pension contributions to half or part of the year? I haven’t come across that before.