ISA S&P500

giogiu1974

Hi, I’d like to invest in S&P500 and I wonder if you know what is the cheapest platform to do that. Like IG, Wealthify, etc?

bjmese

I believe InvestEngine charges no fees for "do it yourself" investments, and the Vanguard S&P 500 ETF is available on there for an ongoing charge of 0.07%

Millyonare

Another vote for InvestEngine. A superb app.

wmb194

giogiu1974 said:

Hi, I’d like to invest in S&P500 and I wonder if you know what is the cheapest platform to do that. Like IG, Wealthify, etc?

In addition to the above, Freetrade, Trading212, CMC Invest. These days there are lots of free ones and they offer the usual, big S&P500 ETFs.

Linton

How does InvestEngine pay its staff and make a profit?

bjmese

Linton said:

How does InvestEngine pay its staff and make a profit?

They also do managed portfolios a la Nutmeg that incur a 0.25% platform fee.

EthicsGradient

An article on Monevator (still available to non-subscribers) explains how S&P 500 ETFs that use full replication of the index (eg Vanguard) and are based outside the USA (eg in Ireland) still have to pay 15% withholding tax on US dividends (it doesn't matter if you have your holding in an ISA or not - it's the ETF paying it). But those that use swaps to replicate the index do not pay this, and thus have a potential 0.3% per year or so extra gain - which the Invesco S&P 500 ETF has shown in practice (it also has a very low OCF).

Investment costs: how low can we go? - Monevator

Swaps are, of course, a complicated financial tool, and are perhaps more vulnerable in the case of worldwide failures of such instruments, as happened with mortgage-backed securities etc. in 2008. So it's not a no-brainer to use this type. But if you're looking for the cheapest possible way of investing in the S&P 500, it's worth considering, and finding a cheap platform that offers the Invesco ETF or a similar one using swaps.

Albermarle

bjmese said:

Linton said:

How does InvestEngine pay its staff and make a profit?

They also do managed portfolios a la Nutmeg that incur a 0.25% platform fee.

I suspect this would not be enough to make a profit, if other users are paying nothing.

It is a typical fintech type start up. Start with a big cash pile and try and build up a customer base/market share.
If successful before the cash runs out, then start introducing more fees and/or sell out to a bigger competitor.

John464

Yes I wonder where no fees platforms make their money too - maybe on the buy/sell spread?
X-O and iweb are good, £5.95 or £5 per trade with no platform fees for ETF
VUSA is a good ETF, but pays dividends in $ which incurs a fee in changing to £, and another fee for reinvesting.
You can avoid both these fees by using an accumulator ETF like CSP1
It can get very complicated working out dividends and capital gain for tax purposes, but you don't need to do that for an ISA
So, whilst VUSA is good, I only use accumulator ETFs in my ISA.

the_goon

Do Investengine not even charge for ETF trades? I always assumed all ETF's incurred more charges than index funds.

wmb194

John464 said:

Yes I wonder where no fees platforms make their money too - maybe on the buy/sell spread?

No, spreads are the same. You can test this when making a trade by looking at live prices and trades and/or getting a quote from another broker.

As much as it can Trading212 appears to make its own market with its own customers before going out to the LSE/market makers so might save some money this way but, judging by its Companies House filings, appears to be a profitable company on the back of its CFD offering.

Freetrade still has a basic, free offering but it is trying to get customers to buy monthly or annual subscriptions to access a wider range of investments, additional order types and research. It also charges a FX fee for foreign trades and might make something on that - T212's FX fee is quite a bit cheaper.