Simple way to the S&P 500

6022tivo

grumiofoundation said:

6022tivo said:

InvesterJones said:

6022tivo said:

So, for simplicity, can anyone point me towards a bank, or site in which the fees are low/reasonable, can form part of a S&S ISA that someone can register an account, deposit some cash, and buy into a fund that is suitable. 

See earlier reply:

InvesterJones said:

6022tivo said:

Some companies offer these S&P type funds or trackers or whatever they are, and it's just a friendly post to find out what is the best way to get involved in one. 

Check out the moneysavingexpert stocks and shares ISA page (https://www.moneysavingexpert.com/savings/stocks-shares-isas/) and pick a platform that works out best for your friend

That's great, thanks. 
But I would not know which one would have an offering that covers this magical "S&P 500" product/fund? 
Or would the vanguard that someone helpfully mentioned cover it? I'm guessing most if not all listed in the S&S page on here will offer that "fund" ? 

https://www.vanguardinvestor.co.uk/investments/vanguard-s-and-p-500-ucits-etf-usd-distributing/overview

I’ll be honest I’m not clear from your posts if you are being fully serious/sarcastic in your use of magical. 

Do you believe there is some magic to the S and P 500? Why does your friend think investing in just the S and P 500 is a good idea? Do you/they understand what the S and P 500 is and how much an investment in this could drop? 

This might sound harsh but why are you advising/helping your friend as you seem to still be researching the fundamentals of investing yourself? 

My days of working out what to invest in are pretty much done. 
Pension is getting 80% of my income through Salary Sacrifice, keeping my eye on the £1 Million limit. 
Premium Bonds at max. 
No mortgage.
6 x Fully stacked Index Linked NS&I pots. 
Few Long Term Cash ISA's at good rates (Coming to an end this year which is sad). 
Few years of S&S Isa's that I'm playing around with but not too fused about. in II.CO.UK 
Some crypto "investments" <- added to trigger some folk, but have done ok in 2021 with them. 

I think I've done ok, and apart from my pension that is subject to market forces, inflation may be a killer on my Cash ISA's when they mature, but the Index linked stuff is giving me a very safe risk free 7% at the moment. 
I don't do risk, I don't gamble with money, and especially anyone elses. 

I have too much other stuff to occupy my mind outside of figures on paper at the moment then to get too involved with gambling on the stock markets and with funds etc. 


It was a general question from a friend that simply went like....

"Hi mate, I'm really interested in the S&P 500 that I've seen on the internet, you tube videos and chats in the pub. 
One of the videos said to open a Charles Stanley account which I've done, but not deposited yet. 
How would you go about investing it and getting involved in "S&P 500"...

I basically replied...
"Not much of an idea mate, but I tell you what, I'll pop a post in a Savings and Investments forum that can be quite good and may help" 
"I'll link you to the replies"

To be honest, I was thinking about not linking him to this thread, but  I think he can weed through the obnoxious replies that appear to haunt this forum and get enough information out of the useful ones which I am very grateful for. 

Thanks again. 

masonic

It rather seems like it would have been better for him to have posted here himself, rather than filtering it though someone who believes investing in the stockmarket is "gambling" and who adds things to posts to "trigger some folk". People often get out of this forum what they put in. It would be irresponsible to help someone into investments they don't understand (using an account that probably isn't best suited to their needs), even more so to do so by proxy.

tebbins

6022tivo said:

grumiofoundation said:

6022tivo said:

InvesterJones said:

6022tivo said:

So, for simplicity, can anyone point me towards a bank, or site in which the fees are low/reasonable, can form part of a S&S ISA that someone can register an account, deposit some cash, and buy into a fund that is suitable. 

See earlier reply:

InvesterJones said:

6022tivo said:

Some companies offer these S&P type funds or trackers or whatever they are, and it's just a friendly post to find out what is the best way to get involved in one. 

Check out the moneysavingexpert stocks and shares ISA page (https://www.moneysavingexpert.com/savings/stocks-shares-isas/) and pick a platform that works out best for your friend

That's great, thanks. 
But I would not know which one would have an offering that covers this magical "S&P 500" product/fund? 
Or would the vanguard that someone helpfully mentioned cover it? I'm guessing most if not all listed in the S&S page on here will offer that "fund" ? 

https://www.vanguardinvestor.co.uk/investments/vanguard-s-and-p-500-ucits-etf-usd-distributing/overview

I’ll be honest I’m not clear from your posts if you are being fully serious/sarcastic in your use of magical. 

Do you believe there is some magic to the S and P 500? Why does your friend think investing in just the S and P 500 is a good idea? Do you/they understand what the S and P 500 is and how much an investment in this could drop? 

This might sound harsh but why are you advising/helping your friend as you seem to still be researching the fundamentals of investing yourself? 

My days of working out what to invest in are pretty much done. 
Pension is getting 80% of my income through Salary Sacrifice, keeping my eye on the £1 Million limit. 
Premium Bonds at max. 
No mortgage.
6 x Fully stacked Index Linked NS&I pots. 
Few Long Term Cash ISA's at good rates (Coming to an end this year which is sad). 
Few years of S&S Isa's that I'm playing around with but not too fused about. in II.CO.UK 
Some crypto "investments" <- added to trigger some folk, but have done ok in 2021 with them. 

I think I've done ok, and apart from my pension that is subject to market forces, inflation may be a killer on my Cash ISA's when they mature, but the Index linked stuff is giving me a very safe risk free 7% at the moment. 
I don't do risk, I don't gamble with money, and especially anyone elses. 

I have too much other stuff to occupy my mind outside of figures on paper at the moment then to get too involved with gambling on the stock markets and with funds etc. 


It was a general question from a friend that simply went like....

"Hi mate, I'm really interested in the S&P 500 that I've seen on the internet, you tube videos and chats in the pub. 
One of the videos said to open a Charles Stanley account which I've done, but not deposited yet. 
How would you go about investing it and getting involved in "S&P 500"...

I basically replied...
"Not much of an idea mate, but I tell you what, I'll pop a post in a Savings and Investments forum that can be quite good and may help" 
"I'll link you to the replies"

To be honest, I was thinking about not linking him to this thread, but  I think he can weed through the obnoxious replies that appear to haunt this forum and get enough information out of the useful ones which I am very grateful for. 

Thanks again. 

No one has been obnoxious, but some of the forum heavyweights can get a bit bored of people asking very basic questions without doing prior research, and of people stuck in the "little bit of knowledge" trap.
That said, investing is one of those things that a lot of people don't know exists until they hear about it, and then have no idea because if you google investing you're bombarded by ads.
You've obviously done well, fair enough.
Your mate is obviously doing well enough to have money to invest.
However investing is not something that should be done on a hunch. You may place football bets on hunches, you do not pick which bank account to use, which insurance to get, which fridge/washing machine/car/house based on hunches.
The S&P 500 is an index, essentially a list of the biggest 500 companies traded on the stock market in the US (-ish). Publicly traded is as opposed to privately owned like Mars, Virgin, Dyson. An index is a list of names with a % next to them, the fund puts that % of your money into that company i.e.
#1 Apple 6.84%
#2 Microsoft 6.24%
... Etc. ...
#500 Under Armour 0.0000...%
The % numbers total 100%, in reality any index fund will always keep a small % of cash on hand.
It has done extremely well since the Great Financial Crisis of 2007-2009, especially through the pandemic, hence all the fuss and hype and interest. Also through the pandemic a lot of people had a lot of spare savings and a lot of spare time, hence the interest in investing.
However, that does not mean it will continue to do as well in future, in fact it indicates it probably won't (IMHO).
Most suggest a globally diversified portfolio is more sensible.
Global index trackers can be a cheap, easy and simple way to get such a portfolio.

aroominyork

dunstonh said:

Asking for a friend. 

He just wants to simply chuck some money into a S&P 500 type account, within an ISA. 

Although the S&P 500 is not really a good choice for the core US holdings.

What other options are there for passive investing in the US? The only one I am aware of (in large caps) in an equal weight S&P fund (XDWE). Do you disagree with the oft-stated mantra that the US is so highly researched that it is difficult to beat the index? It certainly seems true; looking at a 10 year table on Trustnet, only about a quarter of active funds have beaten the index.

dunstonh

Do you disagree with the oft-stated mantra that the US is so highly researched that it is difficult to beat the index?

I use a tracker as the core with a small allocation to a managed satellite fund.

tebbins

With the US already so over-researched I'm sceptical of the value of even bothering to find, research and then use a satellite. I also think that word satellite has been used by the industry to market the idea of using unnecessarily many funds as fashionable or clever. God forbid anyone have a simple portfolio.

GazzaBloom

aroominyork said:

dunstonh said:

Asking for a friend. 

He just wants to simply chuck some money into a S&P 500 type account, within an ISA. 

Although the S&P 500 is not really a good choice for the core US holdings.

What other options are there for passive investing in the US? The only one I am aware of (in large caps) in an equal weight S&P fund (XDWE). Do you disagree with the oft-stated mantra that the US is so highly researched that it is difficult to beat the index? It certainly seems true; looking at a 10 year table on Trustnet, only about a quarter of active funds have beaten the index.

The FTSE USA Index which is made up of around 600 companies, essentially it's the S&P500 plus some mid-cap companies. Blackrock have an index fund that tracks this, Blackrock ACS US Equity Tracker Fund.

https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0000103AV

I invest in this fund via my work pension with Aviva who offer It as Aviva MyM Blackrock US Equity Index Tracker Pension Fund at a very respectable total fee of 0.16%

Vanguard also offer the US Equity Index Fund which tracks the S&P Total Market Index which consists of pretty much the whole US stock market of over 4,000 companies, larger, mid, small and micro cap.

https://www.vanguardinvestor.co.uk/investments/vanguard-us-equity-index-fund-gbp-acc?intcmpgn=equityusa_usequityindexfund_fund_link

The problem with the Total Market Index, and all index's to a degree, is that you are still investing 5.91% in Apple at the top of the index but only a tiny, tiny amount in the majority of the thousands of companies outside the top 500. So, the performance of the index is pretty much pegged to the performance of the top 500, so I'm not really sure of the advantage of holding it over the S&P500.

In fact only 0.00001% is invested in the company currently at the bottom of the index: Contra Aduro Biotech. So if you invested £10,000 into this fund over a year only 1/10th of 1 penny would be invested in Contra Adoro compared to £591 in Apple.

GeoffTF

GazzaBloom said:
The problem with the Total Market Index, and all index's to a degree, is that you are still investing 5.91% in Apple at the top of the index but only a tiny, tiny amount in the majority of the thousands of companies outside the top 500. So, the performance of the index is pretty much pegged to the performance of the top 500, so I'm not really sure of the advantage of holding it over the S&P500.

That is not a problem. It is an essential feature. That is what the respective companies are worth (in the market's estimation). Companies shrink and grow all the time, but no one can reliably predict that in advance of the market. You cannot invest $trillions in micro-caps.

GazzaBloom

Tackkers said:

GazzaBloom said:

aroominyork said:

dunstonh said:

Asking for a friend. 

He just wants to simply chuck some money into a S&P 500 type account, within an ISA. 

Although the S&P 500 is not really a good choice for the core US holdings.

What other options are there for passive investing in the US? The only one I am aware of (in large caps) in an equal weight S&P fund (XDWE). Do you disagree with the oft-stated mantra that the US is so highly researched that it is difficult to beat the index? It certainly seems true; looking at a 10 year table on Trustnet, only about a quarter of active funds have beaten the index.

The FTSE USA Index which is made up of around 600 companies, essentially it's the S&P500 plus some mid-cap companies. Blackrock have an index fund that tracks this, Blackrock ACS US Equity Tracker Fund.

https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0000103AV

I invest in this fund via my work pension with Aviva who offer It as Aviva MyM Blackrock US Equity Index Tracker Pension Fund at a very respectable total fee of 0.16%

Vanguard also offer the US Equity Index Fund which tracks the S&P Total Market Index which consists of pretty much the whole US stock market of over 4,000 companies, larger, mid, small and micro cap.

https://www.vanguardinvestor.co.uk/investments/vanguard-us-equity-index-fund-gbp-acc?intcmpgn=equityusa_usequityindexfund_fund_link

The problem with the Total Market Index, and all index's to a degree, is that you are still investing 5.91% in Apple at the top of the index but only a tiny, tiny amount in the majority of the thousands of companies outside the top 500. So, the performance of the index is pretty much pegged to the performance of the top 500, so I'm not really sure of the advantage of holding it over the S&P500.

In fact only 0.00001% is invested in the company currently at the bottom of the index: Contra Aduro Biotech. So if you invested £10,000 into this fund over a year only 1/10th of 1 penny would be invested in Contra Adoro compared to £591 in Apple.

And on Vanguard this morning US Equity Index Fund is up whilst S&P 500 is down.

Settlement timing. Do you really think a price difference within a day is worth noting?

There is barely a fag paper between the S&P Total Market Index & S&P500 Index over 10 years.

GazzaBloom

GeoffTF said:

GazzaBloom said:
The problem with the Total Market Index, and all index's to a degree, is that you are still investing 5.91% in Apple at the top of the index but only a tiny, tiny amount in the majority of the thousands of companies outside the top 500. So, the performance of the index is pretty much pegged to the performance of the top 500, so I'm not really sure of the advantage of holding it over the S&P500.

That is not a problem. It is an essential feature. That is what the respective companies are worth (in the market's estimation). Companies shrink and grow all the time, but no one can reliably predict that in advance of the market. You cannot invest $trillions in micro-caps.

Yes, you're right, problem isn't the right word, it's how an index works for sure. I just don't really see the benefit of owning infinitesimally small parts of thousands of US companies vs the top 500 which equates to 85% of the market cap anyway.