Cheapest Lifetime ISA all world ETF

older_and_no_wiser

Also consider Fidelity Index World P. 0.12% annual fee. It's a global tracker but without emerging markets.

mugston

Is it possible to buy and sell inside the LISA? If so we should hold HSBC FTSE ALL WORLD INDEX CLASS C until it reaches roughly £20k, then sell it and buy VWRL with it.

From some googling it seems this is an option.

Given we would save £36 in platform fees (and I believe another £21 from trading fees), holding the fund for the first 3 years will save a total of £57.

We can then sell the fund and use the proceeds to buy the cheapest well diversified all world ETF.

Assuming the cost of selling and buying is below £57, this would be the best play.

As we would be buying anyway, the only fixed fee is the £1.50 to sell.

Will the market generally be liquid enough to lose less than 0.37% on the bid/ask spread?

I know selling and rebuying VWRL on Interactive Brokers would usually cost me 0.04% in the bid/ask spread - would margins be similar trading the fund with AJbell or HL?

masonic

older_and_no_wiser said:

Also consider Fidelity Index World P. 0.12% annual fee. It's a global tracker but without emerging markets.

Not an ETF unfortunately so no benefit from a cap on custody fees, but a developed world ETF plus EM ETF was the way I went. That was before the likes of FWRG came along.

InvesterJones

mugston said:

I know selling and rebuying VWRL on Interactive Brokers would usually cost me 0.04% in the bid/ask spread - would margins be similar trading the fund with AJbell or HL?

In the UK platforms are not allowed to make additional margins on the bid/ask spread, so they should be comparable.

FIREmenow

Hi, I asked a similar question recently. 

I had about £19k in AJ Bell LISA in the same HSBC FTSE all world one you mention, and it was time to switch to an ETF to cap the fees. 

The one I chose to switch to is Ishares MSCI ACWI UCITS ETF USD (ACC) GBP

AJ BELL also comes out slightly better than HL for this as the regular saving you can do on HL is only for your own new money going into the LISA, then you would have to pay for an etf trade (think cost is £11.95) to invest the government bonus when it arrives. For AJ Bell the regular investing amount can come from the cash balance in the LISA, and then you can cancel it immediately after, to keep the trade at £1.50, so £3 for two trades per year.

For what it's worth, I did let it build up as a fund, and left sorting out the ETF capping an issue for my future self, but I haven't enjoyed the process of being out of the market to switch to an ETF, and wished I had just started with ETFs in the first place!

AndyTh_2

Why VWRL and not VWRP btw? You wouldn't need the income version within a LISA as dividends would also be lower than share price, so not able to re-invest, and may have fx fee conversion from $ to £. VWRP is the accumulation units version of the same fund and dividends are re-invested from within the ETF.

mugston

FIREmenow said:

For what it's worth, I did let it build up as a fund, and left sorting out the ETF capping an issue for my future self, but I haven't enjoyed the process of being out of the market to switch to an ETF, and wished I had just started with ETFs in the first place!

Do you regret not starting with ETFs simply because of the "hassle" of selling your fund and buying an ETF despite the savings you made?

Or is there a financial reason for the regret?

AndyTh_2 said:

Why VWRL and not VWRP btw? You wouldn't need the income version within a LISA as dividends would also be lower than share price, so not able to re-invest, and may have fx fee conversion from $ to £. VWRP is the accumulation units version of the same fund and dividends are re-invested from within the ETF.

Great point Andy, my plan was to have an accumulating ETF in all of the tax sheltered accounts but forgot about it in this thread.

mugston said:

Edit: I have not included DODL in this comparison, as it is only available to customers who are solely a citizen of UK, which I do not satisfy.

This rule has changed in the past week, and I now plan to use DODL for the first few years.

glenrothes

Dodl

Platform Fee: 0.15%, minimum £12 a year.

Fund Fee: On top of the world HSBC (FTSE All-World index fund) - 0.13%

mugston

Do most investors find holding their LISA, ISA and SIPP all with the same broker helps to reduce fees (as we reach limits faster)?

ColdIron

It depends. Some platforms aggregate holdings across accounts, such as Vanguard Investor. Others, such as HL, work on a per account basis