S&S ISA - HL Ready Made ISA or LifeStrategy

funkey_monkey

Hi,

Got £16k to invest now and £16k to invest at start of new tax year.  I've got a LISA on HL platform which is fully invest in LifeStrategy100 (approx £50k).

I've now got to use up remainder of my ISA allocation for this year and I'm wondering where to place it.
I see HL have ready made ISA plans.  I was looking at the HL Adventurous Managed plan.  It has an annual charge of 1.52%.  I thought this was high.

LS100 is 0.69%.  But is it wise to place it into the same plan as the LISA?

Is there anything else I should be looking at or is it okay to also invest this £32k into LS100?


Thanks.

eskbanker

funkey_monkey said:

LS100 is 0.69%.

Where are you getting that figure from?  Its OCF is 0.22%:

https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-100-equity-fund-accumulation-shares/overview

In terms of investing decisions, there isn't much point in trying to come up with answers without the corresponding questions - LS100 suits those wanting to be fully in equities but with a substantial UK weighting, whereas many would simply use cap-weighted global trackers, but if you're considering a managed fund, what's your rationale, i.e. what are you trying to achieve?

funkey_monkey

Where are you getting that figure from?  Its OCF is 0.22%:

From the factsheet on HL (Cost tab):

The following charges are based on an investment of £5,000
within a Stocks and Shares ISA over 5 years assuming 5.00% growth. Change these assumptions

Investment

£5,000.00

HL charges

£125.18

Investment charges

£66.09

Total charges over 5 years		£191.28
Average annual charge		0.69%
Illustrative 5 year value		£6,166.12
Illustrative 5 year value with no charges applied		£6,381.41

what are you trying to achieve?

Looking for a top quartile fund (or fund of funds) that require minimum management and are up at the adventurous end of the market (hence why LS100).  No preference for passive or active management.

dunstonh

From the factsheet on HL (Cost tab):

HL don't use specific costing.  They use example costing.

Looking for a top quartile fund (or fund of funds) that require minimum management and are up at the adventurous end of the market (hence why LS100).  No preference for passive or active management.

VLS100 is the odd one out in the range.  The others are multi-asset funds.   VLS100 is a global managed fund.    It is often regarded as the weak one in the range because Vanguards management decisions give it a UK bias and since launch, the UK has been one of the worst areas to invest in.  It exists for completeness but plenty of people have piled money but most of them don't know what they are doing and commercially, its been great for Vanguard.

Also, it hasn't been top quartile.   At best, 2nd quartile, and that will largely be on the back of its management decisions to go heavier in the UK.


 

funkey_monkey

  dunstonh said:

From the factsheet on HL (Cost tab):

HL don't use specific costing.  They use example costing.

Looking for a top quartile fund (or fund of funds) that require minimum management and are up at the adventurous end of the market (hence why LS100).  No preference for passive or active management.

VLS100 is the odd one out in the range.  The others are multi-asset funds.   VLS100 is a global managed fund.    It is often regarded as the weak one in the range because Vanguards management decisions give it a UK bias and since launch, the UK has been one of the worst areas to invest in.  It exists for completeness but plenty of people have piled money but most of them don't know what they are doing and commercially, its been great for Vanguard.

Also, it hasn't been top quartile.   At best, 2nd quartile, and that will largely be on the back of its management decisions to go heavier in the UK.


 

Thanks for your detailed reply.  What funds should I be considering?  Something like:
- Vanguard FTSE Global All Cap Index
- Vanguard Funds Plc FTSE All-World UCITS ETF (USD) Accumulating (VWRP)?

ColdIron

funkey_monkey said:

I was looking at the HL Adventurous Managed plan.  It has an annual charge of 1.52%.  I thought this was high.

It is high, very high indeed. HL's in house funds are cash cows for them and rarely (if ever?) translate into better performance. It would have to outperform the market (broadly) every year just to overcome the extra fees

Much of the extra expense comes from an additional layer of fund selection/administration where they select existing funds in the market run by other fund houses, many of these will be actively managed rather than cheap trackers

I can't think of a single good reason to go with such an arrangement

Albermarle

funkey_monkey said:

  dunstonh said:

From the factsheet on HL (Cost tab):

HL don't use specific costing.  They use example costing.

Looking for a top quartile fund (or fund of funds) that require minimum management and are up at the adventurous end of the market (hence why LS100).  No preference for passive or active management.

VLS100 is the odd one out in the range.  The others are multi-asset funds.   VLS100 is a global managed fund.    It is often regarded as the weak one in the range because Vanguards management decisions give it a UK bias and since launch, the UK has been one of the worst areas to invest in.  It exists for completeness but plenty of people have piled money but most of them don't know what they are doing and commercially, its been great for Vanguard.

Also, it hasn't been top quartile.   At best, 2nd quartile, and that will largely be on the back of its management decisions to go heavier in the UK.


 

Thanks for your detailed reply.  What funds should I be considering?  Something like:
- Vanguard FTSE Global All Cap Index
- Vanguard Funds Plc FTSE All-World UCITS ETF (USD) Accumulating (VWRP)?

If you want to be 100% equity ( good for long term growth, but can be very volatile) then the above two give you a more global spread than LS100.
Have you any other investments, in your pension for example? 

funkey_monkey

I've 2 final salary Pensions that are now closed to contributions. I'm currently contributing into my active pension, a Royal London total equity governed portfolio.
I've got a LISA, S&S ISA and small number of shares.

Would I only need one of those funds or split it across the two of then? 

Alexland

HL might be fine for a LISA but the S&S ISA market is more competitive so for two £16k contributions then iWeb (backed by Halifax/Lloyds) would only charge you £5 for each contribution trade and give you access to thousands of funds (inc VLS if you want) with no ongoing platform fee. I can't think of any good reason (other than having it all in one place if that's what you really want) to give your S&S ISA to HL especially with their expensive own brand funds.

In terms of fund choice there's no need to invest in both of those global trackers as they will contain a lot of duplication just pick an index or multi-asset fund that's most suitable for your investing objective for each account.

funkey_monkey

@Alexland thanks for the reply.

So those trackers are suitable, but just pick one of them, and use a different platform than HL?

Alexland

funkey_monkey said:

So those trackers are suitable, but just pick one of them, and use a different platform than HL?

I have no idea if they are suitable for your volatility tolerance or investment timescales but as a rule of thumb a global index tracker might drop around 50% in a bad market crash (and even then you may fear it might drop more) which might be alarming for most investors and it can take years to recover. I would suggest you would only do this if you didn't need access to your money for a very long time and were willing to wait years for recovery when you could have been getting a positive return elsewhere.

If you do go for a global tracker there are the ones that attempt to have almost everything like the All Cap and All World ones or the ones that just cover Developed World mid and large cap stocks which are often cheaper. HSBC do an All World fund that's much cheaper than the Vanguard ETF.

https://monevator.com/low-cost-index-trackers/

While I have been 100% global equities in the past when bonds were really expensive in current market conditions I prefer a mix of different asset classes for a smoother ride which can be easily achieved through a multi asset fund such as VLS60, VLS80 (if you want the UK bias) or HSBC Global Strategy Balanced or Dynamic funds.

https://www.assetmanagement.hsbc.co.uk/en/intermediary/capabilities/multi-asset/hsbc-global-strategy-portfolios

If you decide to hold the fund in an iWeb ISA then go for the Accumulation version to avoid needing to regularly pay a £5 trade reinvest income unless you want to draw the income. Most funds will be on iWeb but you can check on their site. Investing £32k for 2x£5 trades on a reputable platform with no ongoing platform charge is a steal.

https://www.markets.iweb-sharedealing.co.uk/funds-centre/