Which platform is best please?

msauk

I’m interested in the comparison dunstonh is making between VLS and HSBC GS OEICs.

What puzzles me when I look at their profiles on ft.com is the vast difference in cost of a unit for each of these funds: around £200 for VLS, but £2-ish for HSBC GS.

Why such a difference in magnitude for a unit cost? 

underground99

msauk said:

I’m interested in the comparison dunstonh is making between VLS and HSBC GS OEICs.

What puzzles me when I look at their profiles on ft.com is the vast difference in cost of a unit for each of these funds: around £200 for VLS, but £2-ish for HSBC GS.

Why such a difference in magnitude for a unit cost? 

One probably decided that they were going to start at a price of £1 per share instead of £100 or £1000. It's pretty arbitrary. So for every million pounds of assets, when a new investor subscribes £x of cash, one will issue ten times as many units as the other 

You don't have to buy whole units, so when you invest £500 it doesn't matter if you get 25.00000 or 2.50000 or 0.25000 units; what matters is you own £500-worth of shares invested in the fund's portfolio.

dunstonh

What puzzles me when I look at their profiles on ft.com is the vast difference in cost of a unit for each of these funds: around £200 for VLS, but £2-ish for HSBC GS.
Why such a difference in magnitude for a unit cost? 

Launch price and launch dates will vary.      Unit price is irrelevant.    5x4 or 4x5 gives you the same outcome.

msauk

Thanks, underground99 and dunstonh: I had wondered about the arbitrariness of the unit launch price!

I’ve been (passively) investing in VLS 80 Acc units for the last 12 years, within an annual ISA allowance. Reviewing my particular time and money weighted returns is an interesting exercise in itself: about 8.5% for the money-weighted annual return (XIRR), and about 6.5% for an annual time-weighted return (I used Henrywirth.com’s spreadsheet here). The 12 year total profit as a percentage of total investment ‘cost’ looks very healthy: about 57%

Looking ahead to the next 12 years, I’m interested in splitting my existing investments, and future investments, between the fettered (VLS 80) and un-fettered (HSBC GS) products - perhaps 50-50 split. Of the latter, I’ll probably pick the HSBC “dynamic” GS portfolio, as on first glance it looks a similar proportion of stock and bond weighting (80-20), but I need to make some more time to compare. 

eskbanker

msauk said:

I’ve been (passively) investing in VLS 80 Acc units for the last 12 years

Impressive, when it wasn't actually launched until June 2011, i.e. less than ten years ago....

csgohan4

IMO, Pound cost averaging is useful in bear markets and all in one is good for bull markets. 

But it can go either way, you invest now and the fund/stock dips 5% the next day, whereas if you split it, it evens out. Personal preference