Share dealing platforms - totally confused

bowlhead99 wrote: »

Not really.

When the other poster said that there were no incremental costs from using multiple funds if your platform didn't have transaction fees, you said that there were additional costs building a portfolio because "each fund has an OCF, therefore each fund that you buy adds to your costs" (with no implicit acknowledgement that of course each fund you buy could instead decrease your cost if it is a cheaper fund).

When the other poster suggested there was no need to buy a multiasset funds thereby relying on someone else's idea of what a diversified portfolio should look like, you categorically told him that the "Costs will be higher and gains, unlikely to be better, especially given the drag caused by the costs".


No, you have no interest in constructing such a fund so you have no need to build one yourself to prove that it would be more expensive to build one. But what you *should* do is refrain from telling people that it is more expensive to build one when you haven't tried to cost it nor considered that the vanguard fund you'd advocate buying costs more than the sum of its parts.

It costs more because of the convenience of getting a whole "portfolio in a box" which many are willing to pay for because they like convenience and it's a handy solution for a small portfolio that you don't want to have to tend from year to year. But that's not a 'cost' argument that you can use to tell people their portfolio will be more expensive- it's the opposite. It's simply a 'convenience' argument.


Perhaps if you have one great point you should focus on that one greatest point, rather than making specious arguments to belittle others and announce to the world that they have it wrong because of [other reasons which aren't actually very good arguments]. Stick to the"greatest point" rather than diluting it with weak points that you have to backtrack.

Of course, the "greatest point" that multi asset portfolio funds are a good bag of diversification right off the shelf, so better than what you could make yourself, also falls apart on inspection... I could make something more diversified than [Vanguard or BlackRock or HSBC or L&G's multi asset portfolio fund], simply by taking nine parts [V / BR/ HSBC /L&G] and adding one part [something they don't have because they are simple off the shelf funds].

So, the key point is not diversification at low cost. You can create diversification at low cost. Your key point is _*convenience*_.


He quoted a very simple two fund multi asset portfolio (global stocks and global bonds) just to disprove your idea that adding multiple funds made things more expensive ; contrary to your assertion, it made them cheaper. As you must know very well, but don't want to admit, one could add ten or fifteen more holdings if you want to match or beat the diversification of an off the shelf mixed asset fund (which do not in any case try to be the most diversified thing available).