Micro Investments

Spinyadas

Good Afternoon all,

So about a year ago I started with Wombat micro investments and quite liked the picking of their pre packaged groups for investing in. Because I didn't have much money i just started accumulating £10 here and there when I could. Whilst my funds are all performing obviously we are not talking big money but fund value is approaching £200. How much would you recommend having before moving say in S&S ISA and having a play on there? Im guessing the returns would be somewhat better or worse depending on performance of course. Are there pre packaged investments as well as single? do you have to pay management fees as well as %pot fees? Appreciate any thoughts in advance.

MX5huggy

Vanguard is a popular choice, there’s a platform fee 0.15% and then fund fee which varies between 0.09% and up to 0.8% (I think I don’t look at the expensive ones as they are Active funds I’m only interested in passive). All they offer is packaged investing no individual shares. I think £100 is the minimum investment then I don’t think they stop you contributing smaller amounts once open.

Thrugelmir

Spinyadas said:

How much would you recommend having before moving say in S&S ISA and having a play on there? 

Start small and build up over time. It's how the majority of people construct a portfolio. Playing is unlikely to be a successful activity. Better to buy with the aim to hold forever. 

Spinyadas

Thanks Thrugelmir,
Appreciate the comments but how small would you consider small? would you consider £200 enough to move it from Wombat micro investments to the likes of vanguard of HL etc.
Playing was a loose term meaning more its not a sole source of income or future plans just seeing if it is something i can get on with.

MX5huggy

The real advantage of an ISA is it’s a tax wrapper, anything in the ISA is not subject to Dividend tax or Capital Gains Tax, while you have under £5000 neither of these are an issue. 

So then it’s down to fees these have an effect on your investment performance. Wombat is good value as it has no platform fee up to £250 after that it’s 0.1% plus £1 per month so it’s very expensive to hold £260 with them. Vanguard is a straight 0.15% so is cheaper for £250 plus up to £24000 (but if you have that much you need an ISA). 

So I would move £200 to Vanguard, you might have signup saying your going to fund it at £100 per month but you can put £250 in as a starting balance and then cancel the standing order for the monthly. 

If you like the Wombat way of small investments then top it backup over the months then when it gets close to £250 just move the money to Vanguard. 

Other platforms are available but have different fee structures HL is 0.45% but Vanguard only offer Vanguard funds. You should not be looking at individual shares or anything where you are charged a fee to buy as that would eat your capital. Vanguard Exchange Traded Funds are free to buy from Vanguard. 

Linton

Wombat micro investments is "playing".  It surely is never going to be the repository of a large part of your total wealth.


If you enjoy playing at investing, fine.  It is perhaps more constructive than gaming.  However if you want to take investment seriously with the aim of of accumulating serious money I suggest you start with a broad multi-asset fund as part of your pension or in an ISA and start contributing £100s or £1000s rather than £10s.

Spinyadas

MX5huggy said:

The real advantage of an ISA is it’s a tax wrapper, anything in the ISA is not subject to Dividend tax or Capital Gains Tax, while you have under £5000 neither of these are an issue. 

So then it’s down to fees these have an effect on your investment performance. Wombat is good value as it has no platform fee up to £250 after that it’s 0.1% plus £1 per month so it’s very expensive to hold £260 with them. Vanguard is a straight 0.15% so is cheaper for £250 plus up to £24000 (but if you have that much you need an ISA). 

So I would move £200 to Vanguard, you might have signup saying your going to fund it at £100 per month but you can put £250 in as a starting balance and then cancel the standing order for the monthly. 

If you like the Wombat way of small investments then top it backup over the months then when it gets close to £250 just move the money to Vanguard. 

Other platforms are available but have different fee structures HL is 0.45% but Vanguard only offer Vanguard funds. You should not be looking at individual shares or anything where you are charged a fee to buy as that would eat your capital. Vanguard Exchange Traded Funds are free to buy from Vanguard. 

Thank you for the informative post I will have a look at Vanguard later appreciate your comments

Spinyadas

Linton said:

Wombat micro investments is "playing".  It surely is never going to be the repository of a large part of your total wealth.


If you enjoy playing at investing, fine.  It is perhaps more constructive than gaming.  However if you want to take investment seriously with the aim of of accumulating serious money I suggest you start with a broad multi-asset fund as part of your pension or in an ISA and start contributing £100s or £1000s rather than £10s.

Thank you you are right never going to be a large part my wealth and has been for fun as I havent had the money. But have recently sorted my pension out and now am quite intrigued by S&S and whilst i have a little more money than previously I cannot imagine I will ever be in a position to contribute £1000s. I guess unless i am some thought of guru and can pick the markets lol.