Investing for future returns

london21

Hi All,

I have some funds with HL and large chunk of my savings in Santander esaver paying 2.75%

Last year I used all my ISA allowance earlier than the April deadline and price dropped, so this year reduced my monthly ISA savings and still have over £14k of my ISA allowance left.

Because I had bad experience in the past with regards to shares i only now invest in funds.

I am invested in the following funds, now thinking why do i have so many funds but then wanted to diversify but some of them are similar. the lowest fee is the Legal & General US Index. 

Baillie Gifford Managed

Fidelity Index World

Legal & General Future World ESG Developed Index

Legal & General Global Technology Index

Legal & General International Index Trust

Legal & General US Index

They are currently down -3.31%

george4064

I would sell them all and buy a world equity ETF such as VWRL. It will simplify your portfolio but also reduce your ongoing fees as you’ll benefit from the HL charging cap.

Exodi

What percentages do you have in each of these holdings?

There is a lot of crossover, multiple of these funds are investing in the same companies, likely cost inefficient with the various OCR's.

Exodi

george4064 said:

I would sell them all and buy a world equity ETF such as VWRL. It will simplify your portfolio but also reduce your ongoing fees as you’ll benefit from the HL charging cap.

^ this. Or an all world index fund if you have a relatively small holding or it is not economic for you to buy an ETF on HL due to the share dealing charge.

NoviceInvestor1

Firstly do not hold funds with HL - they are charging you 0.45% on top of the fund cost. So a fund may be charging you 0.07% and HL are charging you 0.45% on top. Mental!

Second how did you come up with this selection? It's quite random - global tracker but then you've decided to overweight the US despite the US being 65%+ of a global tracker? You've overweighted tech despite tech being 20%+ of a global tracker?What was the thinking behind the portfolio construction? 

Finally I think BG Managed is an absolute pig of a fund, it's way more volatile than just holding equities, but has returned less than just holding equities. It's a lose lose. So if you do want some multi asset exposure to dampen volatility there are far better choices than this one. 

As per poster above I'd probably simplify - x % global tracker y % in multi asset to dampen volatility if that's what you want (or just stick it all in a multi asset perhaps)

london21

george4064 said:

I would sell them all and buy a world equity ETF such as VWRL. It will simplify your portfolio but also reduce your ongoing fees as you’ll benefit from the HL charging cap.

Thanks checked this but the annual fees would still be 0.79%

HL take 0.45% annual fees, maybe time to find a replacement to HL.

https://www.hl.co.uk/shares/shares-search-results/v/vanguard-ftse-all-world-ucits-etf-usd-acc/costs 

jimjames

london21 said:

george4064 said:

I would sell them all and buy a world equity ETF such as VWRL. It will simplify your portfolio but also reduce your ongoing fees as you’ll benefit from the HL charging cap.

Thanks checked this but the annual fees would still be 0.79%

HL take 0.45% annual fees, maybe time to find a replacement to HL.

https://www.hl.co.uk/shares/shares-search-results/v/vanguard-ftse-all-world-ucits-etf-usd-acc/costs 

Vanguard would only be 0.15% annual fee

london21

Exodi said:

What percentages do you have in each of these holdings?

There is a lot of crossover, multiple of these funds are investing in the same companies, likely cost inefficient with the various OCR's.

Legal & General US Index 34% average annual charge 0.52%

Legal & General International Index Trust 20% average annual charge 0.54%

Fidelity Index World 17% average annual charge 0.57%

Legal & General Global Technology Index 10% average annual charge 0.68%

Legal & General Future World ESG Developed Index 8% average annual charge 0.72%

Baillie Gifford Managed 11% average annual charge 0.84%

 

The 2 worst performing currently Baillie Gifford Managed and Legal & General Global Technology Index

The 2 better performers currently Legal & General US Index and Legal & General International Index Trust

NoviceInvestor1

london21 said:

george4064 said:

I would sell them all and buy a world equity ETF such as VWRL. It will simplify your portfolio but also reduce your ongoing fees as you’ll benefit from the HL charging cap.

Thanks checked this but the annual fees would still be 0.79%

HL take 0.45% annual fees, maybe time to find a replacement to HL.

https://www.hl.co.uk/shares/shares-search-results/v/vanguard-ftse-all-world-ucits-etf-usd-acc/costs 

0.45% capped at £45 in a stocks and shares ISA;

Shares

Including UK and overseas shares, investment trusts, exchange-traded funds, VCTs, gilts and bonds.

0.45%

capped at £45 per year

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

london21

Exodi said:

george4064 said:

I would sell them all and buy a world equity ETF such as VWRL. It will simplify your portfolio but also reduce your ongoing fees as you’ll benefit from the HL charging cap.

^ this. Or an all world index fund if you have a relatively small holding or it is not economic for you to buy an ETF on HL due to the share dealing charge.

Have about 27,844 invested in my ISA funds.

london21

NoviceInvestor1 said:

Firstly do not hold funds with HL - they are charging you 0.45% on top of the fund cost. So a fund may be charging you 0.07% and HL are charging you 0.45% on top. Mental!

Second how did you come up with this selection? It's quite random - global tracker but then you've decided to overweight the US despite the US being 65%+ of a global tracker? You've overweighted tech despite tech being 20%+ of a global tracker?What was the thinking behind the portfolio construction? 

Finally I think BG Managed is an absolute pig of a fund, it's way more volatile than just holding equities, but has returned less than just holding equities. It's a lose lose. So if you do want some multi asset exposure to dampen volatility there are far better choices than this one. 

As per poster above I'd probably simplify - x % global tracker y % in multi asset to dampen volatility if that's what you want (or just stick it all in a multi asset perhaps)

You are right, when I started the funds just thought the fees were the funds fees, was later I found out about the annual charge of 0.45%.

I find HL familiar and easy to use but time to start looking for an alternative. 

The portfolio construction started in 2017, was a bit clueless then just wanted to avoid shares and checked the returns to find them and looked through the key features and documents. In the past lost a lot of money putting large chunks into 1 company and I have a high-risk high return mentality back then. 

Ok need to research and go for 1-2 funds max, global tracker, multi asset tracker funds.

Any recommendations, a good alternative to HL.