Best Global tracker for LISA (AJ Bell)

GeoffTF

grumiofoundation said:

GeoffTF said:

AJ Bell charges a hefty percentage fee to hold OEICs and Unit Trusts. You can avoid that by using ETFs, e.g. VWRL.

For clarify you do not avoid it (entirely), it is capped at 3.50 per month (£42 per year). 

So for lower balances (<16,800) platform fees are the same.

The OCF of VWRL is 0.22%, whereas the fund linked to earlier is 0.13% - so that’s 36% of the hefty platform charge saved! 

VWRL is very popular, but it is cheaper to use VEVE plus a market weight (about 11%) of VFEM. (You can easily verify that you get exactly the same percentage in each market using a spreadsheet, but the combination of the two funds holds more stocks.) That brings the cost down to 0.13%, which is the same as the fund linked earlier.

FIREmenow

Thanks for your comments @GeoffTF and @grumiofoundation

As it is a LISA it is going to be a small pot for quite some time, and we are only going to buy units once (maybe twice) a year: when we pay in a lump sum and then when the government bonus arrives, so I think the fees will work out overall and I would prefer to forget about them the rest of the year and not have to rebalance two funds.  Would definitely be looking at other options if we were going to drip feed and buy units regularly though, that is a good point.

GeoffTF

FIREmenow said:

Thanks for your comments @GeoffTF and @grumiofoundation

As it is a LISA it is going to be a small pot for quite some time, and we are only going to buy units once (maybe twice) a year: when we pay in a lump sum and then when the government bonus arrives, so I think the fees will work out overall and I would prefer to forget about them the rest of the year and not have to rebalance two funds.

You do not have to rebalance the two funds. You just buy and forget. With a market weighted tracker, if a share price doubles, the market weight also doubles, so no trading is needed to keep everything in balance.