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  • FIRST POST
    • appro
    • By appro 6th Jul 18, 9:57 AM
    • 18Posts
    • 5Thanks
    appro
    Stocks & Shares ISA - regular top-ups
    • #1
    • 6th Jul 18, 9:57 AM
    Stocks & Shares ISA - regular top-ups 6th Jul 18 at 9:57 AM
    I've been doing a lot of research on S&S ISA's. I understand various platforms have different charging models (portfolio % charge, fixed annual charge & cost per trade, etc), but I'm not sure what route/provider is best for me.

    I plan to save regularly throughout the tax year, putting in around 250 a month. This will go into a mixture of funds, bonds, shares - I understand it's important to diversify, etc.

    Here are my questions:
    • Every month, when I add the 250 in, how do I allocate this? Can I split this sum up and distribute it amongst my existing portfolio? Like topping up each account?
    • Will each of these 'allocations/purchases' count as a new trade?

    If I understand this process better, then I can make a decision the right platform, based on the costs. I've already run this through a few of the comparison sites, and they do recommend platforms, based on my requirements, but I don't understand the logic behind the recommendations.

    Many thanks in advance.

    Chris.
Page 1
    • MallyGirl
    • By MallyGirl 6th Jul 18, 9:59 AM
    • 3,058 Posts
    • 8,088 Thanks
    MallyGirl
    • #2
    • 6th Jul 18, 9:59 AM
    • #2
    • 6th Jul 18, 9:59 AM
    you'd be better off just choosing one multi asset fund than trying to build in diversification yourself with those size of contributions.
    • ColdIron
    • By ColdIron 6th Jul 18, 10:19 AM
    • 4,812 Posts
    • 6,330 Thanks
    ColdIron
    • #3
    • 6th Jul 18, 10:19 AM
    • #3
    • 6th Jul 18, 10:19 AM
    Are you sure about shares? They can be very expensive for small sums, most people starting out would use funds. Have you decided which fund(s) to invest in? Again most people would make this decision first and then choose the best platform for them and not the other way around. I'd echo MallyGirl's suggestion of a single multi asset fund
    • dunstonh
    • By dunstonh 6th Jul 18, 11:43 AM
    • 95,880 Posts
    • 63,609 Thanks
    dunstonh
    • #4
    • 6th Jul 18, 11:43 AM
    • #4
    • 6th Jul 18, 11:43 AM
    I plan to save regularly throughout the tax year, putting in around 250 a month. This will go into a mixture of funds, bonds, shares - I understand it's important to diversify, etc.
    It is important to diversify. However, at just 250 a go, there are far easier and better ways to achieve that then building a bespoke portfolio.

    For example, if you portfolio weightings had your Japan allocation at 3% then 3% of 250 is 7.5. Are you really going to carry out your research and analysis for something you are putting 7.5 into?

    Multi-asset funds are there to be used by those with smaller amounts.

    If you are using direct assets, like shares and bonds then the dealing costs are likely to be prohibitive and may prevent you ever turning a profit.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • appro
    • By appro 6th Jul 18, 12:48 PM
    • 18 Posts
    • 5 Thanks
    appro
    • #5
    • 6th Jul 18, 12:48 PM
    • #5
    • 6th Jul 18, 12:48 PM
    Thanks for the responses so far - you may have convinced me about multi-asset funds. Cheers.

    But, in terms of my questions above - can I put my monthly 250 into my existing fund(s), and will this be classed as a trade?

    For example, if I go with one diversified fund, and add my 250 to it each month, will this be classed as 12 trades over the year (re charges)?
    • Vortigern
    • By Vortigern 6th Jul 18, 5:02 PM
    • 2,606 Posts
    • 1,794 Thanks
    Vortigern
    • #6
    • 6th Jul 18, 5:02 PM
    • #6
    • 6th Jul 18, 5:02 PM
    For example, if I go with one diversified fund, and add my 250 to it each month, will this be classed as 12 trades over the year (re charges)?
    Originally posted by appro
    Yes 12 trades, but not all platforms have a per trade fee.

    Vanguard does not charge per trade for its Lifestrategy funds on its own platform.

    Baillie Gifford does not charge per purchase in its investment trust savings plan - but it does charge to sell and has to charge you for stamp duty on purchases.

    These are just examples; there are many more.
    • MallyGirl
    • By MallyGirl 6th Jul 18, 5:20 PM
    • 3,058 Posts
    • 8,088 Thanks
    MallyGirl
    • #7
    • 6th Jul 18, 5:20 PM
    • #7
    • 6th Jul 18, 5:20 PM
    most platforms have a regular investment fee which is a lot lower than the adhoc fees - maybe 1 each for a monthly commitment.
    • thickasabrick
    • By thickasabrick 6th Jul 18, 5:22 PM
    • 51 Posts
    • 40 Thanks
    thickasabrick
    • #8
    • 6th Jul 18, 5:22 PM
    Stocks & Shares ISA - regular top-ups
    • #8
    • 6th Jul 18, 5:22 PM
    I recently started putting 100 a month into a Vanguard Stocks and Shares ISA.

    Trading and management costs could make it unviable given the amount I have to invest.

    I ended up buying units of an electronically traded fund. Namely the " Vanguard FTSE All-World High Dividend Yield UCITS ETF (VHYL) ".

    I already have their "Vanguard LifeStrategy" fund in my pension so was aware of the nature of an index tracker and "passive investing" with low costs. Although VHYL management costs are slightly higher at 0.29% there is more diversity.

    Bit of a shocker when you see that first trade go through and you see a loss due to the costs and the change in price. For me this is a learning experience so worth it.

    Worth checking the costs for other stocks and shares ISA providers. thisismoney have a list at this page
    thisismoney.co.uk/money/diyinvesting/article-1718291/Pick-best-cheapest-investment-Isa-platform.html

    Monevator has a page listing low cost index trackers although it might be out of date now as it's dated July 2017
    monevator.com/low-cost-index-trackers/
    • Cash-Strapped.T32
    • By Cash-Strapped.T32 6th Jul 18, 6:45 PM
    • 516 Posts
    • 292 Thanks
    Cash-Strapped.T32
    • #9
    • 6th Jul 18, 6:45 PM
    • #9
    • 6th Jul 18, 6:45 PM
    Totally agree with the advice to the OP not to go into too much "fine detail", but just to give some context to his answers, so that the advice already given (hopefully) carries more weight..

    I

    Here are my questions:
    • Every month, when I add the 250 in, how do I allocate this? Can I split this sum up and distribute it amongst my existing portfolio? Like topping up each account?
    Yes - within reason.
    In theory, every penny you pay into the S&S ISA can be used to purchase however much of whatever asset the platform has on offer - either buying into more of what you've already got, or adding new assets.

    In reality however, each fund will have a minimum allowable purchase, each share has a given price per share, etc... so you can't literally any amount into any asset.


    So let's say I've got 2x funds in my ISA which I wish to top-up.
    Each one has a minimum purchase of 100, and I pay in 150 per month.

    You can see how I can't buy into both funds each month - I'll either have to alternate each month, or buy 100 of one, and leave the 50 in cash until the next month, or some other such plan. You can see where this is going.


    The caveat to this, as alluded to by Mallygirl, is that if you set up a regular payment plan with the platform (often by direct-debit), then this minimum pay-in is often reduced, allowing you to buy into more funds with the same amount (obviously this is sepeate to whether it's actually sensible to buy into many funds with a small total amount).

    For instance, if my 2x funds above have the same 100 minimum cash buy-in, but a 10 minimum regular payment option, then I can easily split my 150 in any way I see fit across the two funds as 10 into 150 will go many ways.

    • Will each of these 'allocations/purchases' count as a new trade?
    Yeppers. Each purchase of a new asset, adding more of an existing asset, or sale of some/all of an existing asset is a trade.
    This is why it really pays to work out beforehand if a cheaper platform (but one that has a fee per-trade) is actually better in the long-run depending on how you plan your purchases.

    Chris.
    Originally posted by appro
    Hope this helps - I know much of this info was already alluded to by the more knowledgable posters above, just thought it would help to be explicit in some of the answers.
    Last edited by Cash-Strapped.T32; 06-07-2018 at 6:49 PM.
    • ValiantSon
    • By ValiantSon 6th Jul 18, 7:20 PM
    • 2,536 Posts
    • 2,521 Thanks
    ValiantSon
    I recently started putting 100 a month into a Vanguard Stocks and Shares ISA.

    Trading and management costs could make it unviable given the amount I have to invest.

    I ended up buying units of an electronically traded fund. Namely the " Vanguard FTSE All-World High Dividend Yield UCITS ETF (VHYL) ".

    I already have their "Vanguard LifeStrategy" fund in my pension so was aware of the nature of an index tracker and "passive investing" with low costs. Although VHYL management costs are slightly higher at 0.29% there is more diversity.

    Bit of a shocker when you see that first trade go through and you see a loss due to the costs and the change in price. For me this is a learning experience so worth it.

    Worth checking the costs for other stocks and shares ISA providers. thisismoney have a list at this page
    thisismoney.co.uk/money/diyinvesting/article-1718291/Pick-best-cheapest-investment-Isa-platform.html

    Monevator has a page listing low cost index trackers although it might be out of date now as it's dated July 2017
    monevator.com/low-cost-index-trackers/
    Originally posted by thickasabrick
    Vanguard Investor don't charge any fees for trading (except on live priced ETFs).
    • appro
    • By appro 7th Jul 18, 11:24 AM
    • 18 Posts
    • 5 Thanks
    appro
    Thanks everyone - really useful advice. Much appreciated.
    • Westie983
    • By Westie983 7th Jul 18, 7:02 PM
    • 4,614 Posts
    • 15,149 Thanks
    Westie983
    Glad we could help,

    the power of this forum to guide people in the right direction.

    Westie983
    Save 12k in 2019 #10 Total (16000)+0/12000 = 0.0%
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    Total 1.00/15865 = 2.00%
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