Selling OEIC Funds to buy ETFs - How long out of investing and thoughts on ETFs?

BigBlueSky

I currently hold a number of OEIC funds in both my ISA and SIPP and looking at ways to save fees and earn cashback on the move.  The new platform I'm looking to use Freetrade (and maybe Trading212 when they launch their no-fee SIPP) doesn't offer OEIC's only ETF's, so I thought it would be the ideal time to convert my existing holdings with my current provider over to ETF's.

My question is how long would my investments be out of market if I sell an OEIC fund before the funds are available for investing in an ETF.

I currently hold the following OEIC's (I've built them up over years).  The fund with the most invested is the Vanguard LifeStrategy (Around 40% of my portfolio), so it is going to take many trades to sell these off (at a cost too).

Aegon High Yield Bond GBP B Acc

AXA Framlington Biotech Fund - Z Acc

BlackRock Gold and General D Acc

BNY Mellon Asian Income Instl W Inc

Fidelity Index UK P Acc

First Sentier StewartInvGlblEmLdrBGBPAcc

FTF Royce US Smaller Companies W Acc

Invesco UK Eq High Inc UK Z Acc

L&G US Index I Acc

Royal London Corporate Bond M Inc

Royal London Sterl Extra Yld Bd A

Schroder UK Dynamic Smaller Coms Z Acc

Vanguard LifeStrategy 100% Equity A Acc

I'm thinking of going for low cost tracker ETF's of some type (I'm still researching).  The bulk I'm expecting to place into one of these.

VWRP - Vanguard FTSE All-World UCITS ETF (0.22% TER)
HMWO - HSBC MSCI World UCTIS (0.15% TER)
WEBG - Amundi Prime All country World UCITS ETF (0.07% TER)
LGGG - L&G Global Equity UCITS ETF (0.10% TER)

All the above seem extremely similar ETF's, with the main differences being fees and the number of holdings contained within each, with the Vanguard being the highest with over 3,600.

What are people's thoughts on this - I'd love to hear what people have to say about my planned ETF's, current portfolio, etc.

Thanks in advance

InvesterJones

BigBlueSky said:

My question is how long would my investments be out of market if I sell an OEIC fund before the funds are available for investing in an ETF.

[snip]

I'm thinking of going for low cost tracker ETF's of some type (I'm still researching).  The bulk I'm expecting to place into one of these.

VWRP - Vanguard FTSE All-World UCITS ETF (0.22% TER)
HMWO - HSBC MSCI World UCTIS (0.15% TER)
WEBG - Amundi Prime All country World UCITS ETF (0.07% TER)
LGGG - L&G Global Equity UCITS ETF (0.10% TER)

All the above seem extremely similar ETF's, with the main differences being fees and the number of holidays contained within each, with the Vanguard being the highest with over 3,600.

What are people's thoughts on this - I'd love to hear what people have to say about my planned ETF's, current portfolio, etc.

First question depends on the platform - if they require cleared funds for investment or if they're ok to use positive account balance. If the latter then you'd only be out of the market the number of seconds it took for you to buy the ETF as soon as your account is credited for the sale price of the OEICs. If cleared funds required then usually about 3-5 working days.

in terms of the ETFs, while they're roughly similar, they vary in emerging market coverage, distribution vs accumulation, and index (with associated mild ESG tilt or not).

BigBlueSky

InvesterJones said:

First question depends on the platform - if they require cleared funds for investment or if they're ok to use positive account balance. If the latter then you'd only be out of the market the number of seconds it took for you to buy the ETF as soon as your account is credited for the sale price of the OEICs. If cleared funds required then usually about 3-5 working days.

in terms of the ETFs, while they're roughly similar, they vary in emerging market coverage, distribution vs accumulation, and index (with associated mild ESG tilt or not).

Thanks for your reply.

The current platform is Interactive Investor.

I'm not an expert but was assuming all of those ETFs would be similar enough to just pick one of them rather than multiple.  I'd be aiming for accumulation funds that don't incur FX fees.

Linton

You should choose funds primarily on what they invest in and whether together they produce a well diversified portfolio  that is able to satisfy your objectives and implements your strategy.  ETFs are mostly restricted to Index funds.  Although many funds in your current list could be replaced by ETFs some cant be or are in areas where index funds seem to be sub-optimal. In that latter category I would put High Yield bonds, Income, niche sectors, and smaller companies.

If you go for global trackers, precisely which ones you choose does not matter much, anything reasonable will give you much the same results compared with another and any noticable differences that do happen wont be predictable.

Is your move to different funds driven by a change in objectives, a considered change in strategy, or a decision that your current allocations were wrong?  Itt would seem you are moving from a portfolio containing a moderate % of  higher risk bonds to 100% equity.  Is this intentional?

coyrls

I think letting your choice of platform determine your investment choices is a case of the tail wagging the dog.  I think you should choose your investments based on your investment strategy, as Linton suggests and then choose the most appropriate platform on which to hold those investments.

Aidanmc

@BigBlueSky Some of your ETF choices are distribution and some are accumulation, also some are developed world only and some include emerging markets.

I recently invested in a global ETF, after researching and trying to decide i eventually settled for FWRG Invesco Markets II Plc FTSE All-World UCITS ETF which includes emerging markets 0.15% ocf and used Trading 212.

You can compare ETF's here https://www.justetf.com/uk/

VWRP includes emerging markets

HMWO is developed world distribution but HMWS is acc version

WEBG is distribution includes emg markets and tracks Solactive Index

LGGG is accumulation developed world etf tracking a Solactive index

BigBlueSky

Linton said:

You should choose funds primarily on what they invest in and whether together they produce a well diversified portfolio  that is able to satisfy your objectives and implements your strategy.  ETFs are mostly restricted to Index funds.  Although many funds in your current list could be replaced by ETFs some cant be or are in areas where index funds seem to be sub-optimal. In that latter category I would put High Yield bonds, Income, niche sectors, and smaller companies.

If you go for global trackers, precisely which ones you choose does not matter much, anything reasonable will give you much the same results compared with another and any noticable differences that do happen wont be predictable.

Is your move to different funds driven by a change in objectives, a considered change in strategy, or a decision that your current allocations were wrong?  Itt would seem you are moving from a portfolio containing a moderate % of  higher risk bonds to 100% equity.  Is this intentional?

Thanks for your reply - I appreciate your feedback.

My current portfolio has been build up over the last 25 years.  At the start I bought a bit of this and a bit of that - Mainly going off the Hargreaves Lansdown 'recommended funds' at the time.

I've listed the percentage of each of the funds I hold as part of my portfolio.  Over 60% of it is in the first three funds below which if I understand correctly could be replaced with index fund ETF's.

Vanguard LifeStrategy 100% Equity A Acc - 40%

L&G US Index I Acc - 12%

Invesco UK Eq High Inc UK Z Acc - 9%

FTF Royce US Smaller Companies W Acc - 8%

Schroder UK Dynamic Smaller Coms Z Acc - 7%

Royal London Sterl Extra Yld Bd A - 5%

AXA Framlington Biotech Fund - Z Acc - 4%

BlackRock Gold and General D Acc - 4%

Aegon High Yield Bond GBP B Acc - 3%

Fidelity Index UK P Acc - 3%

First Sentier StewartInvGlblEmLdrBGBPAcc - 3%

Royal London Corporate Bond M Inc - 3%

BNY Mellon Asian Income Instl W Inc - 2%

No particular change in objectives.  Just tidying up my portfolio and moving from primarily funds to ETF's.  Hoping to get something I can just buy and forget about it in the most part.  Happy with higher risk too though.

BigBlueSky

coyrls said:

I think letting your choice of platform determine your investment choices is a case of the tail wagging the dog.  I think you should choose your investments based on your investment strategy, as Linton suggests and then choose the most appropriate platform on which to hold those investments.

Thanks.  I'm not very experienced so ideally wanting something fairly standard I can buy and just leave for the next 15-20 years or so.  Thinking going for index based might be less complicated - and as they can be got as part of ETF's, would save a few hundred a year in fees.

BigBlueSky

Aidanmc said:

@BigBlueSky Some of your ETF choices are distribution and some are accumulation, also some are developed world only and some include emerging markets.

I recently invested in a global ETF, after researching and trying to decide i eventually settled for FWRG Invesco Markets II Plc FTSE All-World UCITS ETF which includes emerging markets 0.15% ocf and used Trading 212.

You can compare ETF's here https://www.justetf.com/uk/

Thanks - That was unintentional when putting up the list.  I would be looking to get the accumulative varient whichever I end up going for.  That was another ETF I have on my short list (FWRG Invesco).

Thanks for the website - I will take a look.

EthicsGradient

As far as time out of market goes, on Interactive Investor the settlement time is normally 4 working days for OEICs, and 2 working days for ETFs. So this typically means, say, give the order to sell the OEIC on Monday, at least an hour before the valuation point for the OEIC (typically midday, so 11am, but some, particularly North American ones, can be later), the order is finalised the first thing Tuesday, with Friday the settlement day, and then on Wednesday you can use the proceeds to buy an ETF which will also settle on the Friday.

It's possible that they'll allow you to buy the ETF as soon as the sell order is finalised first thing on Tuesday, but I think I tried that once and the system didn't let me.

Albermarle

BigBlueSky said:

Linton said:

You should choose funds primarily on what they invest in and whether together they produce a well diversified portfolio  that is able to satisfy your objectives and implements your strategy.  ETFs are mostly restricted to Index funds.  Although many funds in your current list could be replaced by ETFs some cant be or are in areas where index funds seem to be sub-optimal. In that latter category I would put High Yield bonds, Income, niche sectors, and smaller companies.

If you go for global trackers, precisely which ones you choose does not matter much, anything reasonable will give you much the same results compared with another and any noticable differences that do happen wont be predictable.

Is your move to different funds driven by a change in objectives, a considered change in strategy, or a decision that your current allocations were wrong?  Itt would seem you are moving from a portfolio containing a moderate % of  higher risk bonds to 100% equity.  Is this intentional?

Thanks for your reply - I appreciate your feedback.

My current portfolio has been build up over the last 25 years.  At the start I bought a bit of this and a bit of that - Mainly going off the Hargreaves Lansdown 'recommended funds' at the time.

I've listed the percentage of each of the funds I hold as part of my portfolio.  Over 60% of it is in the first three funds below which if I understand correctly could be replaced with index fund ETF's.

Vanguard LifeStrategy 100% Equity A Acc - 40%

L&G US Index I Acc - 12%

Invesco UK Eq High Inc UK Z Acc - 9%

FTF Royce US Smaller Companies W Acc - 8%

Schroder UK Dynamic Smaller Coms Z Acc - 7%

Royal London Sterl Extra Yld Bd A - 5%

AXA Framlington Biotech Fund - Z Acc - 4%

BlackRock Gold and General D Acc - 4%

Aegon High Yield Bond GBP B Acc - 3%

Fidelity Index UK P Acc - 3%

First Sentier StewartInvGlblEmLdrBGBPAcc - 3%

Royal London Corporate Bond M Inc - 3%

BNY Mellon Asian Income Instl W Inc - 2%

No particular change in objectives.  Just tidying up my portfolio and moving from primarily funds to ETF's.  Hoping to get something I can just buy and forget about it in the most part.  Happy with higher risk too though.

Well it looks like quite a big change in investment strategy.
You are going from a portfolio that is about 60% equity index funds, with a diverse number of other funds, some of which are not equity related at all, to a 100% equity index tracker portfolio.
So if nothing else you have notched up the risk/volatility.

Now it could be a good move and your portfolio probably needed tidying up, but the main question is do you really want to go 100% equity that could fall 40% in a couple of weeks. Could you live with that ?