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  • FIRST POST
    • amiehall
    • By amiehall 12th Feb 11, 4:25 PM
    • 1,353Posts
    • 1,609Thanks
    amiehall
    FTSE 100 vs All Share
    • #1
    • 12th Feb 11, 4:25 PM
    FTSE 100 vs All Share 12th Feb 11 at 4:25 PM
    I have no real experience with investing but have decided I want to start putting some of my savings into a tracker fund on a monthly basis rather than keep it all in cash.

    I'm talking relatively small sums at first and have decided to use an HSBC tracker within an ISA as the charges seem very low and I've always had good experiences with HSBC.

    My stumbling block is deciding the difference between the 100 index and the all share for investment purposes. I'm looking for something fairly low on the risk front, slow and steady wins the race and all that. Does one offer higher returns paired with higher risks or what? I'm finding it hard to find any real source of information on this.

    Am I best off sticking with the 100 as a starter investment or does a lot of the growth in the FTSE come from small companies making it "big"?
Page 1
    • DavidHayton
    • By DavidHayton 12th Feb 11, 4:56 PM
    • 461 Posts
    • 359 Thanks
    DavidHayton
    • #2
    • 12th Feb 11, 4:56 PM
    • #2
    • 12th Feb 11, 4:56 PM
    Hi Amiehall,
    You will probably find that there is virtually no difference between the fortunes of an FTSE-100 tracker and an All-share tracker. Certainly hasn't been much over the past five years:
    http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-ftse-100-index-accumulation/charts

    The reason is that the 100-share index comprises about 80% of the all-share index (it is weighted by value). If you want to follow the fortunes of the other 20% then you could choose an FTSE-250 tracker.

    Bear in mind that any tracker that follows the 100-share index will invest about a quarter of your money in just four companies ... Vodafone, BP, Shell, and HSBC. This is risky! The proportion invested by an all share tracker in the same four companies will be slightly less ... but not much.

    Whatever you do, check the TER figure on the fund (this tells you the percentage being deducted every year in charges). No point paying 1% a year when another fund manager can track the same index for a 0.25% charge.

    David
    • moneylover
    • By moneylover 12th Feb 11, 11:46 PM
    • 1,626 Posts
    • 408 Thanks
    moneylover
    • #3
    • 12th Feb 11, 11:46 PM
    • #3
    • 12th Feb 11, 11:46 PM
    I have read so many times that a tracker is more or less just 4 shares. So what are the advantages over buying the individual shares? What happened as a result of BP tumbling?
    I have never bought a tracker and keep wondering if I am missing something. All my money is in cash and I would like one or two fairly low risk investments but cannot quite get my head around trackers. I know that profit can come from dividends but then with cash the same thing comes from compounded interest. So why do people buy trackers? If they are good to have as a diversified portfolio is it HSBC that has lowest charges and would people agree it doesnt matter if you go for FTSE 100 or all share or FTSE 250?
    Many thanks!
    • sabretoothtigger
    • By sabretoothtigger 13th Feb 11, 12:06 AM
    • 10,026 Posts
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    sabretoothtigger
    • #4
    • 13th Feb 11, 12:06 AM
    • #4
    • 13th Feb 11, 12:06 AM
    I know that profit can come from dividends but then with cash the same thing comes from compounded interest

    Big difference really. Cash interest is usually much lower.
    Average return on the ftse is about 6% a year excluding dividends, average cash return has probably been close to zero after accounting for inflation doubling the price of everything

    Shares are direct investment with all the risk and profit. Cash savings are indirect investment where by a bank will use your cash to fund their loan operations to companies and housing, etc


    BP going to a low price occurred when FTSE also fell a thousand points. Its a large influence.

    The advantage of shares over an index is it is more direct and increases the influence further
    Tokyo residential prices have gone from 4x London in 1990 to ľ London in 2014
    Maybe this is one of those cases where you canít go home again,
    by Ben S. Bernanke, former Fed chairman
    • bigsy
    • By bigsy 13th Feb 11, 7:52 AM
    • 178 Posts
    • 140 Thanks
    bigsy
    • #5
    • 13th Feb 11, 7:52 AM
    • #5
    • 13th Feb 11, 7:52 AM
    I have read so many times that a tracker is more or less just 4 shares.
    Originally posted by moneylover
    http://www.ftse.com/Indices/UK_Indices/index.jsp

    Look at the above link for information regarding various FTSE indices. The links to the factsheets include the top holdings in the FTSE 100 and FTSE All-Share as of May last year. At that stage the top ten companies made up over 46% weight of the FTSE 100, and just under 40% of the All-Share.
  • leahciM
    • #6
    • 13th Feb 11, 9:44 AM
    • #6
    • 13th Feb 11, 9:44 AM

    I'm talking relatively small sums at first and have decided to use an HSBC tracker within an ISA as the charges seem very low and I've always had good experiences with HSBC.
    Originally posted by amiehall

    While others have rightly pointed out the differences between the FTSE100 and All Share (ie, very little) the HSBC tracker is probably one of the best ones. Low 0.27% TER and reasonable tracking margin.


    I would suggest though that you go for the accumulation (ACC) fund rather than the income (INC) fund - in an ACC fund, the dividends get used automatically to buy new shares in the fund.

    In an ICC fund, dividends get returned to you - but talking the amounts you are, what are you really going to do with £2 a year put into your account? May as well let it build up and use the magic of compounding.


    One final point, ACC funds are usually priced higher than INC funds - this is because the dividend has been taken into account but over mid-long term timeframes, the overall returns are practically identical.
    Savings: 9.5%
    Investments: 10%
    • moneylover
    • By moneylover 13th Feb 11, 10:31 PM
    • 1,626 Posts
    • 408 Thanks
    moneylover
    • #7
    • 13th Feb 11, 10:31 PM
    • #7
    • 13th Feb 11, 10:31 PM
    While others have rightly pointed out the differences between the FTSE100 and All Share (ie, very little) the HSBC tracker is probably one of the best ones. Low 0.27% TER and reasonable tracking margin.


    I would suggest though that you go for the accumulation (ACC) fund rather than the income (INC) fund - in an ACC fund, the dividends get used automatically to buy new shares in the fund.

    In an ICC fund, dividends get returned to you - but talking the amounts you are, what are you really going to do with £2 a year put into your account? May as well let it build up and use the magic of compounding.

    One final point, ACC funds are usually priced higher than INC funds - this is because the dividend has been taken into account but over mid-long term timeframes, the overall returns are practically identical.
    Originally posted by leahciM
    The HSBC accumulation fund sounds exactly what I am looking for , please can you say what this is actually called so that there is no confusion. Many thanks
  • leahciM
    • #8
    • 13th Feb 11, 10:55 PM
    • #8
    • 13th Feb 11, 10:55 PM
    It depends where you're buying it from as to the exact name:

    Here is the fund on trustnet (a pretty well respected source of fund/share info.)

    Here's the HSBC PDF to go over.

    Who are you planning to buy the fund with? (iii, H&L etc?)

    if you let me know that, it'd be easier to give you the exact link.
    Savings: 9.5%
    Investments: 10%
    • moneylover
    • By moneylover 13th Feb 11, 11:04 PM
    • 1,626 Posts
    • 408 Thanks
    moneylover
    • #9
    • 13th Feb 11, 11:04 PM
    • #9
    • 13th Feb 11, 11:04 PM
    HL- many thanks
  • leahciM
    I'm afraid I'm going to have to bow out here - I'm not familiar with the H&L site (I use iii) and I can't seem to find the fund on there.

    There's plenty of people on here who use H&L and I'm sure they'll be able to post the link *hint hint*

    Sorry I couldn't be of more help.

    The epic is MDFTA on iii by the way.
    Last edited by leahciM; 13-02-2011 at 11:29 PM.
    Savings: 9.5%
    Investments: 10%
    • Ifts
    • By Ifts 14th Feb 11, 3:08 AM
    • 1,827 Posts
    • 1,151 Thanks
    Ifts
    HL- many thanks
    Originally posted by moneylover
    Is this the HSBC FTSE All Share Index Fund by Hargreaves Lansdown that you are trying to locate:

    HSBC FTSE All Share Index Fund http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-ftse-all-share-index-inst-accumulation
    Never let the perfume of the premium overpower the odour of the risk
    • moneylover
    • By moneylover 14th Feb 11, 2:50 PM
    • 1,626 Posts
    • 408 Thanks
    moneylover
    yes, I am thinking of investing in a cheap tracker with H L - it is the first time I will have had an investment. Is there any real difference in how a FTSE 100 share tracker and an all share index does at the moment? I cannot make up my mind which to dip my toe into!
    Many thanks
    Hilary
    • Linton
    • By Linton 14th Feb 11, 2:53 PM
    • 11,505 Posts
    • 11,920 Thanks
    Linton
    yes, I am thinking of investing in a cheap tracker with H L - it is the first time I will have had an investment. Is there any real difference in how a FTSE 100 share tracker and an all share index does at the moment? I cannot make up my mind which to dip my toe into!
    Many thanks
    Hilary
    Originally posted by moneylover

    Not much difference - FTSE-100 companies comprise 80% of the all share.
    • moneylover
    • By moneylover 14th Feb 11, 3:18 PM
    • 1,626 Posts
    • 408 Thanks
    moneylover
    yes, thats why I wondered. Stick a pin in it?
    • cepheus
    • By cepheus 14th Feb 11, 3:41 PM
    • 19,211 Posts
    • 20,338 Thanks
    cepheus
    I think the best way to reduce risk is to diversify into different sectors, and filter in the money over a number of years.
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