funds - where do i start

westy69

ok i fancy having a dabble in funds but i have no idea where to start, 1stly i am not looking for advice on which fund/s to pick i am happy to do research and make my own decisions on that (allbeit they may be bad decisions :rotfl: ) i only have £1000 to play with so having had a nosey at the HL site that seems to be the minimum amount in most funds is that correct?

Ok so have i got this right i set up an account with a fund supermarket - any reccomendations on the cheapest/best? i pay my 1k to whichever fund i have picked i get a set amount of units for my money they each have a value which goes up or down and i can sell them when i want - i assume for a fee? right so far? sorry this is all completely new to me

thanks

munk

There's some info on pros/cons of investing DIY here:

http://forums.moneysavingexpert.com/showthread.html?p=7928011#post7928011

Fund supermarkets are the best if you're going DIY as they offer the best discounts on the initial charges and rebates on annual charges. Most times like you say the minimum lump sum investment per fund is £1k.

However if you wanted a spread of different funds in your portfolio then you could always ring up the broker and ask if they can do it - maybe ask if you can spread the £1k across 4 funds maybe. Alternatively you could opt to pay into a number of different funds monthly in which case you can invest from as little as £50/month or less, say into 4 diff funds - do that for 5 months and then stop so you've got £250 in each fund.

Just an idea to get started.

westy69

cheers :beer: with the H&L account it appears to me you have to pay a 5% set up fee or am i looking at the wrong thing completely?

meester

no setup fee. There is a 5-5.5% charge for most retail funds, but next to this HL show their discount, which is usually the same - 5 to 5.5%, so you effectively pay nothing, or perhaps 0.5%

westy69

confuuuuused do i open it as an isa or a vantage isa or just open an account?

Aegis

If you're trading funds, you can use either the Vantage share account or the Vantage ISA account. If you've not used your ISA, you may as well open that and start contributing.

westy69

so just the ISA not the vantage ISA? i have 7k in a barclays WPM maxi ISA started in 2007 (jan) so i assume i am ok to put 1k into an isa this year?

thanks again

munk

You have until April 5th to pay into your 2007/8 ISA (April 6th 2007 - April 5th 2008). You would do that by filling out a 'HL Vantage Maxi/Mini Stocks & Shares ISA Application Form' (I'm reading that from a copy of the application form I have here).

You'd have to be very quick about it, might not get processed in time unless you send it off asap (ie tomorrow! Actually I don't know how late you can leave it to be honest but there's only a week or so left!).

You can download a copy of the application form from their site (have to jump through hoops a bit, fill out a form, but not major hassle).

Vantage is the name of HL's trading platform - the system where you buy/sell/switch funds/shares/VCTs/cash ISAs even.

Once you've filled up your ISA for a given year, if you want to invest more via HL into funds then you'd apply for a 'Vantage Fund Account' - this is basically the same as the Vantage S&S ISA Account except for the fact the investments held in it are subject to tax. Sometimes referred to as 'outside ISA' investments for obvious reasons.

Similarly if you wanted to invest in direct shares then you'd apply for a HL Vantage Share Account - same with Cash ISA and other investment types (SIPP/VCTs/can't think of any others:)).

westy69

thank you, i assume if this is the only thing i am going to now invest in in this tax year it makes no diffrence whether i open it as a mini or maxi isa? (1k investment)

westy69

also if i miss this years deadline i assume i can jump into next years as i dont want to rush my choice of fund?

earlgrey_3

westy69 wrote: »

also if i miss this years deadline i assume i can jump into next years as i dont want to rush my choice of fund?

You should be able to get in without a problem if you've got the cash in the bank, they'll be working extended hours including till midnight on 5 April. You can use a debit card on-line or print off a form and send it with a cheque.

If you want to defer investing you can opt for the "high interest cash option" http://www.h-l.co.uk/home/hico.hl which pays 6% gross, 4.8% net for 3 months. That way you don't lose this this year's allowance and July is traditionally regarded as a better time to invest than April (or not).