Best Stock&Share Isa for beginners

grumiofoundation

Arsenal2019 said:

grumiofoundation said:

Arsenal2019 said:

On the vast majority of platforms you don't have to pay trading fees to buy/sell if you buy funds (as opposed to ETFs, shares).

With the amounts you are looking at paying trading fees would ideally be avoided.  

E.g. HL fees 
https://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

Thanks. I think I’ve landed at the conclusion of - start with Freetrade especially because of the low amounts I will be starting with and low & regular investments each month. Once I’ve built my portfolio and knowledge up, then move to HL?
thoughts?

Freetrade ISA costs £3 per month - £36 per year 
HL 0.45% - on £1000 that’s £4.50
vanguard 0.15% - £1.50 

So going with Freetrade ISA Costs you over £30 - that’s your first 3% of returns gone.

As I said before investing in just one diversified fund is a sensible way to go in which case a limited fund offering may not the worse thing in the world…

So, just to confirm, when I buy ETF’s and Index funds on HL, I don’t pay the fee? I only pay the fee for when I invest into individual stocks ?? So the only fee I will be paying is 0.45% p/a on the what I have invested ?

Incorrect. See link I posted above for HLs fees
You pay trading fees to buy exchange traded instruments - so ETFs (and shares, investment trusts) 

Edit: 1 am not sure exactly what you mean by index funds (since an ETF can track an index) so these may be ‘Funds’ -  OEICs and unit trusts.
’Funds’ are free to trade on most platforms (e.g. HL, vanguard). 

(link below covers some of differences) 

the fact the F in ETFs stands for fund is confusing 

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/how-to-build-a-portfolio-part-five

Arsenal2019 said:

ColdIron said:

For low sums you want a percentage fee provider that does not charge for trades, a fraction of a percent on small values is a very small fee

Many platforms such as HL, Vanguard etc use this charging model for funds (UTs/OEICs). HL (0.45%) will charge you £4.50 pa while Vanguard (0.15%) would save you £3.00 a year at £1.50 on a £1,000 holding. Once your sums become considerably larger you could look for fixed fee providers

the only noticeable fee then really is the £11-13 fee you’re changed when buying/selling?

If you stick to funds there is usually no trading fee. £0. Only securities that trade on an exchange such as company shares, investment trusts and ETFs incur trading fees (and possibly stamp duty) although Vanguard do not charge at all for their ETFs if you don't use live trading

Most novice investors would be well advised to stick to funds

https://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

Thank you. Okay so what you’re saying is that I would be better starting with someone like HL due to the lower fees. 

I would only get charged 0.45% per annum and only get charged £11-13 for individual stocks I purchase? I.e. buying a share directly from Microsoft ?

Why are you looking at purchasing if individual shares if you only have £1000
to invest?


If you look at an example of an all world tracked (link below) you will see Microsoft is already ~3%.

https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc/overview

Arsenal2019

You are confusing 2 fees. The platform fee and the trading fee

Both HL and Vanguard charge a platform fee (that 0.45% or 0.15% pa) whatever you buy in an ISA, neither charge a trading fee for funds

HL will charge you an additional trading fee for ETFs

Vanguard won't charge you an additional trading fee for ETFs if you don't use live trading

Thanks for putting up with me. So HL charge the £11-13 for when you buy stocks? And they charge an additional reading fee when you buy ETF’s and Index funds? If so what is that fee do you know 

Arsenal2019

grumiofoundation said:

Arsenal2019 said:

grumiofoundation said:

Arsenal2019 said:

On the vast majority of platforms you don't have to pay trading fees to buy/sell if you buy funds (as opposed to ETFs, shares).

With the amounts you are looking at paying trading fees would ideally be avoided.  

E.g. HL fees 
https://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

Thanks. I think I’ve landed at the conclusion of - start with Freetrade especially because of the low amounts I will be starting with and low & regular investments each month. Once I’ve built my portfolio and knowledge up, then move to HL?
thoughts?

Freetrade ISA costs £3 per month - £36 per year 
HL 0.45% - on £1000 that’s £4.50
vanguard 0.15% - £1.50 

So going with Freetrade ISA Costs you over £30 - that’s your first 3% of returns gone.

As I said before investing in just one diversified fund is a sensible way to go in which case a limited fund offering may not the worse thing in the world…

So, just to confirm, when I buy ETF’s and Index funds on HL, I don’t pay the fee? I only pay the fee for when I invest into individual stocks ?? So the only fee I will be paying is 0.45% p/a on the what I have invested ?

Incorrect. See link I posted above for HLs fees
You pay trading fees to buy exchange traded instruments - so ETFs (and shares, investment trusts) 

Edit: 1 am not sure exactly what you mean by index funds (since an ETF can track an index) so these may be ‘Funds’ -  OEICs and unit trusts.
’Funds’ are free to trade on most platforms (e.g. HL, vanguard). 

(link below covers some of differences) 

the fact the F in ETFs stands for fund is confusing 

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/how-to-build-a-portfolio-part-five

Arsenal2019 said:

ColdIron said:

For low sums you want a percentage fee provider that does not charge for trades, a fraction of a percent on small values is a very small fee

Many platforms such as HL, Vanguard etc use this charging model for funds (UTs/OEICs). HL (0.45%) will charge you £4.50 pa while Vanguard (0.15%) would save you £3.00 a year at £1.50 on a £1,000 holding. Once your sums become considerably larger you could look for fixed fee providers

the only noticeable fee then really is the £11-13 fee you’re changed when buying/selling?

If you stick to funds there is usually no trading fee. £0. Only securities that trade on an exchange such as company shares, investment trusts and ETFs incur trading fees (and possibly stamp duty) although Vanguard do not charge at all for their ETFs if you don't use live trading

Most novice investors would be well advised to stick to funds

https://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

Thank you. Okay so what you’re saying is that I would be better starting with someone like HL due to the lower fees. 

I would only get charged 0.45% per annum and only get charged £11-13 for individual stocks I purchase? I.e. buying a share directly from Microsoft ?

Why are you looking at purchasing if individual shares if you only have £1000
to invest?


If you look at an example of an all world tracked (link below) you will see Microsoft is already ~3%.

https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc/overview

Well for now and especially the next several months I will probably just invest in ETFs. I would only be intrigued and spend low amount in individual stocks for a bit of fun.

so to confirm, with HL, investing in ETF = No additional fee. So if I just purchased ETF I would only pay the 0.45 annual fee   

grumiofoundation

Arsenal2019 said:

grumiofoundation said:

Arsenal2019 said:

grumiofoundation said:

Arsenal2019 said:

On the vast majority of platforms you don't have to pay trading fees to buy/sell if you buy funds (as opposed to ETFs, shares).

With the amounts you are looking at paying trading fees would ideally be avoided.  

E.g. HL fees 
https://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

Thanks. I think I’ve landed at the conclusion of - start with Freetrade especially because of the low amounts I will be starting with and low & regular investments each month. Once I’ve built my portfolio and knowledge up, then move to HL?
thoughts?

Freetrade ISA costs £3 per month - £36 per year 
HL 0.45% - on £1000 that’s £4.50
vanguard 0.15% - £1.50 

So going with Freetrade ISA Costs you over £30 - that’s your first 3% of returns gone.

As I said before investing in just one diversified fund is a sensible way to go in which case a limited fund offering may not the worse thing in the world…

So, just to confirm, when I buy ETF’s and Index funds on HL, I don’t pay the fee? I only pay the fee for when I invest into individual stocks ?? So the only fee I will be paying is 0.45% p/a on the what I have invested ?

Incorrect. See link I posted above for HLs fees
You pay trading fees to buy exchange traded instruments - so ETFs (and shares, investment trusts) 

Edit: 1 am not sure exactly what you mean by index funds (since an ETF can track an index) so these may be ‘Funds’ -  OEICs and unit trusts.
’Funds’ are free to trade on most platforms (e.g. HL, vanguard). 

(link below covers some of differences) 

the fact the F in ETFs stands for fund is confusing 

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/how-to-build-a-portfolio-part-five

Arsenal2019 said:

ColdIron said:

For low sums you want a percentage fee provider that does not charge for trades, a fraction of a percent on small values is a very small fee

Many platforms such as HL, Vanguard etc use this charging model for funds (UTs/OEICs). HL (0.45%) will charge you £4.50 pa while Vanguard (0.15%) would save you £3.00 a year at £1.50 on a £1,000 holding. Once your sums become considerably larger you could look for fixed fee providers

the only noticeable fee then really is the £11-13 fee you’re changed when buying/selling?

If you stick to funds there is usually no trading fee. £0. Only securities that trade on an exchange such as company shares, investment trusts and ETFs incur trading fees (and possibly stamp duty) although Vanguard do not charge at all for their ETFs if you don't use live trading

Most novice investors would be well advised to stick to funds

https://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

Thank you. Okay so what you’re saying is that I would be better starting with someone like HL due to the lower fees. 

I would only get charged 0.45% per annum and only get charged £11-13 for individual stocks I purchase? I.e. buying a share directly from Microsoft ?

Why are you looking at purchasing if individual shares if you only have £1000
to invest?


If you look at an example of an all world tracked (link below) you will see Microsoft is already ~3%.

https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc/overview

Well for now and especially the next several months I will probably just invest in ETFs. I would only be intrigued and spend low amount in individual stocks for a bit of fun.

so to confirm, with HL, investing in ETF = No additional fee. So if I just purchased ETF I would only pay the 0.45 annual fee   

Have you read the link? 

You need to pay a trading fee to buy an ETF with HL. 

You need to distinguish between funds and ETFs (posted link above) - they aren’t the same thing. 

If you are planning to invest in individual shares with small amounts (depends how much this means) then you would want a platform that does not charge to trade. As otherwise you will be spending a decent % of your investment on trading fees. 
Although you will struggle to find many posters on this forum who will recommend that you do this rather than just buying one diversified fund with your first £1000 

ColdIron

Arsenal2019 said:

You are confusing 2 fees. The platform fee and the trading fee

Both HL and Vanguard charge a platform fee (that 0.45% or 0.15% pa) whatever you buy in an ISA, neither charge a trading fee for funds

HL will charge you an additional trading fee for ETFs

Vanguard won't charge you an additional trading fee for ETFs if you don't use live trading

Thanks for putting up with me. So HL charge the £11-13 for when you buy stocks? And they charge an additional reading fee when you buy ETF’s and Index funds? If so what is that fee do you know 

There are only so many ways of saying the same thing, you should read what has been posted several times

Let's try an example

HL - funds (unit trust/OEICs)
0.45% pa platform fee. No trading fee

HL - ETFs, company shares and investment trusts

0.45% pa platform fee. Plus trading fee

Vanguard - funds (unit trust/OEICs)
0.15% pa platform fee. No trading fee

Vanguard - ETFs (no company shares or investment trusts)

0.15% pa platform fee. No trading fee

At the risk of muddying the waters there is also the following but get a grip on the above first

Index trackers can be either funds or ETFs

HL charge £11.95 per trade which is why it is very uneconomic for novices to stray outside funds. They do have a £1.50 trading fee on a small list of restricted securities if you set up regular monthly investing but let's walk before we run eh?

Vanguard charge £7.50 for live trading ETFs but there is no reason a novice would want to get involved in this

daveharruk

Arsenal2019 said:

tacpot12 said:

You are having trouble because you are looking for a retail product (a S&S ISA) that allows you to access foreign markets directly. Very, very few retail investors want to do that, so S&S ISAs don't really offer the features you are looking for. 99.9% of retail investors what to access foreign markets via a collective investment such as a Unit Trust Fund, ETF or Investment Trust, and they do this easily within a Stocks and Shares ISA using funds that are denominated in GBP, so there is no currency risk. 

With only £1000 to invest and no experience of losing all your money, I would say you are not really ready for a platform that will let you invest in foreign markets directly. My advice would be to open a SIPP with AJ Bell, and invest your £1000 into the shares that you can invest in directly on their platform. You can invest directly in a number of US and European shares with them.

If you decide that you still want to invest directly in foreign markets, I would suggest you have a look at Saxo.

I’m already investing into a pension so I don’t really want to be adding into another. 

I’ll have a look at Saxo, I haven’t hheard of them before but it is something to think about thanks 

If you are wanting to try out investing/trading - starting with a small amount - and keeping these investments for a long time, then I don't understand why you don't want to open a SIPP since you'll automatically get at least a 20% bump in value without having to do anything. Sure, you might pay some tax when you eventually take money out and SIPP platforms tend to have higher charges, but over time these will become less important as the value grows. If you use a FreeTrade SIPP the benefits would outweigh the small extra cost, especially as the costs give you more trading options.

I think the argument over "foreign markets" is a red herring - good traders invest in the best opportunities they can find, whereever they can find them - and so it makes absolutely no sense to restrict yourself to the UK markets - this is because different countries or sectors tend to gain momentum for a period of time (and so most stocks in them also tend to benefit from that momentum). The Indian market has recently been doing incredibly well and so being able to invest in this market over that period would have really boosted your chances of achieving good returns.

Finally, it is misleading to suggest that there is no currency risk in funds that are denominated in GBP - the stocks that are held in funds are bought and sold in the local currency so a fund can gain or lose when currencies fluctuate. A small number of funds are hedged but they are always more expensive - and you pay this fee whether or not the fluctuation is in your favour or not - so they don't really make any sense unless you've got a strong reason to think there will be a big and long-term change. My best advice about "currency risk" is to forget about it, as the effect it will have long-term will be negligible compared to the effects of the choices you make in stocks or other assets.

Arsenal2019

grumiofoundation 

Have you read the link? 

You need to pay a trading fee to buy an ETF with HL. 

You need to distinguish between funds and ETFs (posted link above) - they aren’t the same thing. 

If you are planning to invest in individual shares with small amounts (depends how much this means) then you would want a platform that does not charge to trade. As otherwise you will be spending a decent % of your investment on trading fees. 
Although you will struggle to find many posters on this forum who will recommend that you do this rather than just buying one diversified fund with your first £1000 

Hi,
I have read the link and it makes sense now- I think! I though ETF&Index funds are the same, but they’re slightly different !

so my understanding, someone like me with a lower budget would be more sensible to invest in ETF/Index funds and if I wanted to for a bit of fun, open another account (obviously I can’t open another Isa) and have a bit of fun with low amounts in individual shares 

HCIMbtw

sevenhills said:

HCIMbtw said:

i played around with a couple of grand on trading 212 over the past year and bit and with the exception of GME, pretty much chose terrible across the board, found myself impatient and making bad decisions.. (this is in the middle of pretty much the biggest bull run ever) it was a learning process, i don't regret it, but lost a couple of hundred quid in the process

HCIMbtw said:
I'm 44% up since starting investing in October 2019 in their ISA.. i'll be negative if global markets crash, but whatever, just stick with the long term plan and keep contributing 

So you are up overall, cannot blame the platform for some losses.

Could you point me to the bit where I blamed the platform? 

Arsenal2019

daveharruk said:

Arsenal2019 said:

tacpot12 said:

You are having trouble because you are looking for a retail product (a S&S ISA) that allows you to access foreign markets directly. Very, very few retail investors want to do that, so S&S ISAs don't really offer the features you are looking for. 99.9% of retail investors what to access foreign markets via a collective investment such as a Unit Trust Fund, ETF or Investment Trust, and they do this easily within a Stocks and Shares ISA using funds that are denominated in GBP, so there is no currency risk. 

With only £1000 to invest and no experience of losing all your money, I would say you are not really ready for a platform that will let you invest in foreign markets directly. My advice would be to open a SIPP with AJ Bell, and invest your £1000 into the shares that you can invest in directly on their platform. You can invest directly in a number of US and European shares with them.

If you decide that you still want to invest directly in foreign markets, I would suggest you have a look at Saxo.

I’m already investing into a pension so I don’t really want to be adding into another. 

I’ll have a look at Saxo, I haven’t hheard of them before but it is something to think about thanks 

If you are wanting to try out investing/trading - starting with a small amount - and keeping these investments for a long time, then I don't understand why you don't want to open a SIPP since you'll automatically get at least a 20% bump in value without having to do anything. Sure, you might pay some tax when you eventually take money out and SIPP platforms tend to have higher charges, but over time these will become less important as the value grows. If you use a FreeTrade SIPP the benefits would outweigh the small extra cost, especially as the costs give you more trading options.

I think the argument over "foreign markets" is a red herring - good traders invest in the best opportunities they can find, whereever they can find them - and so it makes absolutely no sense to restrict yourself to the UK markets - this is because different countries or sectors tend to gain momentum for a period of time (and so most stocks in them also tend to benefit from that momentum). The Indian market has recently been doing incredibly well and so being able to invest in this market over that period would have really boosted your chances of achieving good returns.

Finally, it is misleading to suggest that there is no currency risk in funds that are denominated in GBP - the stocks that are held in funds are bought and sold in the local currency so a fund can gain or lose when currencies fluctuate. A small number of funds are hedged but they are always more expensive - and you pay this fee whether or not the fluctuation is in your favour or not - so they don't really make any sense unless you've got a strong reason to think there will be a big and long-term change. My best advice about "currency risk" is to forget about it, as the effect it will have long-term will be negligible compared to the effects of the choices you make in stocks or other assets.

I’ve never really given SIPPs a thought as everyone I’ve spoken to, and majority of places on the internet have always suggested the Isa is the best way forward. 

So you’re saying you get an extra 20% of your value 

Alexland

Arsenal2019 said:

I though ETF&Index funds are the same, but they’re slightly different !

They might both hold similar underlying investments but ETFs can be traded on the live market wheras traditional OEIC funds are forward priced so you would be agreeing to buy or sell at a future price depending on the exact timing of the fund order cutoff and valuation points. Platforms have various ongoing and trading charges for different types of assets so it's about finding an asset and platform combination that you are happy with for your account valuation and trading frequency.

Arsenal2019 said:

So you’re saying you get an extra 20% of your value 

Sadly it' not that simple as many pensioners find they have sufficient income in retirement to pay some income tax but usually at a lower level of tax than the benefit they received when making the initial pension contribution. It's easier to think of it as deferring the tax to pay at a hopefully lower rate in future. If you have access to a salary sacrifice workplace pension this is more efficient that contributing directly into a SIPP as you would also save the national insurance on the contribution. Some of us have transferred lump sums from our workplace pensions into SIPPs to get wider choice and potentially lower charges.