Small Investments into Shares/ETFs

Chetverka

Rollinghome said:

HL charge £11.95 to trade equities, bonds and ETFs, but charge nothing to buy and sell "funds" - which covers unit trusts and the more modern form that are called OEICs (open ended investment companies). 

Instead they have a platform charge which for anything other than very large portfolios is 0.45% pa. So for a £1000 portfolio of funds your total annual fees to them would be £4.50.  Add to that the annual charge for say the HSBC FTSE All-World Index Fund of 0.13% so a further £1.30 pa, £5.80 pa in all, 48p a month.

For that you'd get what some people think is still a posh platform with lots of facilities, including cash ISAs, where you can switch around your investments as often as you like free of any charge.  You'd also have access by phone to a real person to ask questions. I'd assume you could open a non-ISA account just to have a look around.

There are limits on the mininum buy which might be a problem for you, though there is a way to get around it, and they have some sort of regular saving scheme that someone else can tell you about.  Then, when you get to £20k or so remember to have a look around again.

Another option, but not on your permitted list, is something like Invest Engine.

But as others have pointed out the most reliable and straightforward way of increasing your wealth at this point is through cash savings, and that's where I would put my £1k.  Only invest at this stage if you think the increased hassle and risk is worth it for the experience, and won't be disappointed if the rewards are less than you expect.

Equities are expected to give a bigger return than cash over the long as a reward for the risk. That risk is real. Only invest if you are prepared to ride out the falls and stay in for that long term. 

PS. L&G and HSBC are the "fund managers".  Hargreaves Lansdown are a platform, an intermediary like the others on your list who do a bit more than a stockbroker.  I'd suggest you open at HL account and have a poke around, look at some fancy charts etc, even if you decide to stick to cash or find a better option elsewhere.

@Rollinghome, thank you so much. I now have a much greater appreciation for Hargreaves Lansdown. I’ll see how I get on with Interactive Brokers and if I don’t like then, then I’ll switch to HL.

ColdIron

Chetverka said:

ColdIron said:

Most of those will let you buy open ended funds (OEICs). There is a lot more choice and you can buy part of a unit for as little as £25

That £11.95 at HL does not apply to funds, there is no charge to buy or sell funds. Any percentage fee platform will be very cheap on small amounts, e.g £4.50 on £1,000 for your first year at HL, the cost of a coffee

When IWeb become Scottish Widows they will offer free regular investing and no annual fee

Then you could use an ISA and avoid all that transferring malarkey, tax and detailed record keeping required by a GIA

What's not to like?

Thank you so much @ColdIron - having a look if OEICs are available on Interactive Brokers(they do not charge anything for holding assets). 

For example, I found there 

GB00BSZ8GD97
HSBC SP 500 EQUAL WEIGHT EQUITY INDEX "C" (GBP) ACC
ALLFUNDS

What is interesting, it charges 0.17% and Vanguard for its ETF - VUAG charges only 0.07%.

Does HSBC fund have any advantages over VUAG?

Thanks again ColdIron, will be looking more into OEICs to invest into my ISA account in small portions.

VUAG is a stock/standard S&P 500 tracker, the allocations are based on market capitalisation so needs little attention. If you like, the allocations are always 'right'

That HSBC fund is more niche, the allocations are equal weighted so needs more work by the fund manager to keep it within the fund's remit, hence the higher cost

Chetverka

ColdIron said:

Chetverka said:

ColdIron said:

Most of those will let you buy open ended funds (OEICs). There is a lot more choice and you can buy part of a unit for as little as £25

That £11.95 at HL does not apply to funds, there is no charge to buy or sell funds. Any percentage fee platform will be very cheap on small amounts, e.g £4.50 on £1,000 for your first year at HL, the cost of a coffee

When IWeb become Scottish Widows they will offer free regular investing and no annual fee

Then you could use an ISA and avoid all that transferring malarkey, tax and detailed record keeping required by a GIA

What's not to like?

Thank you so much @ColdIron - having a look if OEICs are available on Interactive Brokers(they do not charge anything for holding assets). 

For example, I found there 

GB00BSZ8GD97
HSBC SP 500 EQUAL WEIGHT EQUITY INDEX "C" (GBP) ACC
ALLFUNDS

What is interesting, it charges 0.17% and Vanguard for its ETF - VUAG charges only 0.07%.

Does HSBC fund have any advantages over VUAG?

Thanks again ColdIron, will be looking more into OEICs to invest into my ISA account in small portions.

VUAG is a stock/standard S&P 500 tracker, the allocations are based on market capitalisation so needs little attention. If you like, the allocations are always 'right'

That HSBC fund is more niche, the allocations are equal weighted so needs more work by the fund manager to keep it within the fund's remit, hence the higher cost

Understood, thank you @ColdIron.

fwor

Chetverka said:

I believe investing in the US economy for ten years could yield around 15% of the average return, which is my rationale for choosing shares. 

I guess the question some here would ask is - why only the US economy? I suspect that most of us here invest - as a matter of basic principle - in the global economy, rather than pinning our hopes on one specific country. That will generally mean investing in one or more global multi-index funds, rather selecting individual shares?

Chetverka

fwor said:

I guess the question some here would ask is - why only the US economy? I suspect that most of us here invest - as a matter of basic principle - in the global economy, rather than pinning our hopes on one specific country. That will generally mean investing in one or more global multi-index funds, rather selecting individual shares?

I am planning to invest in the S&P 500(UK), FTSE 100 indices. This will cover me USA and the UK.
Then I wanted to find a fund covering Europe excluding the UK, but did not manage to find one which would have a small share price and be available on the broker I am using. 
To cover Europe, I will probably go with Vanguard FTSE Developed Europe UCITS - (EUR) Accumulating ETF, but this also has about 20% invested in the UK.

Still researching what fund to use to cover development economies. 

I guess you're right - if you want global exposure, invest in a global fund. 

eskbanker

Chetverka said:

I am planning to invest in the S&P 500(UK)....

Are you sure about that?!

Chetverka said:
I guess you're right - if you want global exposure, invest in a global fund. 

Indeed - there are plenty of global funds that save you having to identify individual funds for each market, so they're the more obvious place to start unless you wish to make management decisions to use different weightings, for example.

Chetverka

eskbanker said:

Chetverka said:

I am planning to invest in the S&P 500(UK)....

Are you sure about that?!

I wish I could edit my post.... 

Chetverka said:
I guess you're right - if you want global exposure, invest in a global fund. 

Indeed - there are plenty of global funds that save you having to identify individual funds for each market, so they're the more obvious place to start unless you wish to make management decisions to use different weightings, for example.

Ultimately, this is my goal. I’m betting on Rachel Reeves to further lower the FTSE 200, so I’d like to have exposure to it directly. 

eskbanker

Chetverka said:

Chetverka said:
I guess you're right - if you want global exposure, invest in a global fund. 

Indeed - there are plenty of global funds that save you having to identify individual funds for each market, so they're the more obvious place to start unless you wish to make management decisions to use different weightings, for example.

Ultimately, this is my goal. I’m betting on Rachel Reeves to further lower the FTSE 200, so I’d like to have exposure to it directly. 

Each to their own but investing is generally a long-term activity that shouldn't be unduly influenced by short-term noise, and belief that you can time the market is often unsupported by the evidence....

Chetverka

eskbanker said:

Each to their own but investing is generally a long-term activity that shouldn't be unduly influenced by short-term noise, and belief that you can time the market is often unsupported by the evidence....

Above is probably the best investment advice anyone could give.  I am on par at the moment with the investment I bought on Friday - S&P 500,  might sell in on Monday to invest the whole pot into a global index.