AJ Bell - Changing to an ETF

rjmachin

Hi,

I currently have my S&S Lifetime ISA with AJ Bell, which has around £15k invested in the Vanguard LS 80% Accumulation fund.

My fees at the moment are about £3 per month, which is what I expect.

From next April / June (when the bonus is added), I should have £20k in there, and the fees will be around £4 per month.

I know that ETF's have a maximum charge of £3.50 per month, but a higher £9.95 investment fee, so it will probably be a good time to switch over to using ETF's instead.  (I would sell in 1 transaction, £1.50, then buy in one transaction)

What is your opinion on the Vanguard FTSE All World as an alternative?   VWRL is one I hear a lot of, but I see there is the VWRP, which is an accumulation one, but mentions USD.

I would like an accumulation one as it is going to be there for about 18-19 years before I turn 60 and can withdraw from it.

So, is VWRP better than VWRL for me, or does VWRP have other charges because of the USD aspect?

Are there any other suggestions for an alternative to VLS80/100 as a ETF?

masonic

The base currency of both VWRL and VWRP is USD. Both trade in GBP. With VWRL you will get a USD dividend that will need to be converted to GBP (subject to some fx fee), with VWRP it will accumulate in the ETF. Check the size and liquidity of VWRP as it I believe it is a relatively new addition and may be smaller and more illiquid than VWRL.

VWRL has no UK bias, unlike VLS. You could add that back in using VUKE. You could split out the emerging markets to save on fund fees by using VEVE and VFEM. There are probably even lower cost ETFs, although the same arguments about liquidity and size would apply.

lopsyfa

You can use the regular investment service of AJ Bell to also buy in one go for £1.50 but you need to choose from one of the supported ETFs (https://www.youinvest.co.uk/our-services/qualifying-regular-investments) and do the transaction on the 10th of the month. Not a massive savings in % terms for a £20000 transaction but every little helps.

Millyonare

Switching to InvestEngine, which is £0 per month, and £0 fees, with similar spreads as others, might save you the best part of £1k in fees over those 18-19 years. See bottom of page.

https://investengine.com/isa/

Not investment advice, etc. Dyor.

Alistair31

Millyonare said:

Switching to InvestEngine, which is £0 per month, and £0 fees, with similar spreads as others, might save you the best part of £1k in fees over those 18-19 years. See bottom of page.

https://investengine.com/isa/

Not investment advice, etc. Dyor.

Nice to see they now have VWRP available but you should note the OP is looking for solution in LISA, not ISA. InvestEngine do not offer this.

frankmassiebonsai

Another option to look at perhaps is AJ Bell's own Dodl app-based offer. It's a limited number of investment options but they are now accepting Lifetime ISA transfer in and the fees are 0.15% (minimum 1£/month) and nothing for trades. It's limitations mean it won't be right for everyone though.

Albermarle

rjmachin said:

Hi,

I currently have my S&S Lifetime ISA with AJ Bell, which has around £15k invested in the Vanguard LS 80% Accumulation fund.

My fees at the moment are about £3 per month, which is what I expect.

From next April / June (when the bonus is added), I should have £20k in there, and the fees will be around £4 per month.

I know that ETF's have a maximum charge of £3.50 per month, but a higher £9.95 investment fee, so it will probably be a good time to switch over to using ETF's instead.  (I would sell in 1 transaction, £1.50, then buy in one transaction)

What is your opinion on the Vanguard FTSE All World as an alternative?   VWRL is one I hear a lot of, but I see there is the VWRP, which is an accumulation one, but mentions USD.

I would like an accumulation one as it is going to be there for about 18-19 years before I turn 60 and can withdraw from it.

So, is VWRP better than VWRL for me, or does VWRP have other charges because of the USD aspect?

Are there any other suggestions for an alternative to VLS80/100 as a ETF?

There are two things going on at once here.
1) You want to change how you invest on the AJ Bell platform to potentially save a miniscule amount in charges
2) You are looking at increasing the risk level of your investment.

Point 2) is far more important than Point 1) but Point 1) seems to be the driver for the change, which is not the right way around.

You should pick the right investment first and worry about charges afterwards, unless they are excessive ( which £4 a month is not )

rjmachin

Albermarle said:

1) You want to change how you invest on the AJ Bell platform to potentially save a miniscule amount in charges
2) You are looking at increasing the risk level of your investment.

Point 2) is far more important than Point 1) but Point 1) seems to be the driver for the change, which is not the right way around.

You should pick the right investment first and worry about charges afterwards, unless they are excessive ( which £4 a month is not )

You are correct.  Ideally, I would like to keep the VLS 80, but I cannot see it available as an ETF.

Including next April, I have another 8 years that I can add money to it, which will take me to £55k in contributions before any losses/gains.

At that point, the fees may be over £11 per month in the current fund.

You may be right, that £4 per month is not excessive, and maybe in the future the VLS 80 will become available as an ETF.

Hmmm, maybe I should just leave things as they are....

masonic

You can easily redress the risk increase by including 20% VAGP

Albermarle

You may be right, that £4 per month is not excessive, and maybe in the future the VLS 80 will become available as an ETF

It will not become an ETF, as it is not designed that way . ETF's normally just follow a specified index. So as Masonic says to replicate it with ETF's, you would need two ( at least )

Kendall80

I find AJBell quite expensive for ETF trading. I only have one in my portfolio at present and it costs £10 each time I invest in it.