The Lemon Fool

I'm sort of decided I want to invest in a Global tracker, and have been attracted to Vanguard. My wife does have an account with L&G but charges seem much higher for this type of product.
I would do this in an their ISA which carries an annual charge of 1.5%

However I'm reluctant to lump it all in, would prefer a smaller lump sum and then drip feed into VEVE charge 0.18% and VFEM, 0.25%, as this seems cheaper. However there seems to be a cost to trade on a monthly basis and I cannot figure this out seemingly without signing up ?

Any advice, could this be achieved more cheaply elsewhere, would drip feeding make it way too expensive, would I be better doing a similar thing via another platform or even using my wife's L&G account ? I'm looking to feed in c20K per year

"I would do this in an their ISA which carries an annual charge of 1.5%" is not very explicit. Whose ISA are you talking about? The Vanguard ISA has an annual charge of 0.15%, which is a big improvement on 1.5%. Even so, after five years, at £20K per year, you would have £100K in the account, even without any of the growth that you hope to achieve. 0.15% of £100K is £150. Ouch. If you do use the Vanguard ISA, you would not pay to buy or sell open ended fund units, and you also do not pay to buy or sell ETF shares via Vanguard's daily bulk transaction. Alternatively, if you use iWeb, you do not pay any annual charge, but you do pay £5 per trade. That is £60 pa if you buy every month. iWeb would be more expensive during the first year, but should be cheaper after that.

GeoffF100 wrote:"I would do this in an their ISA which carries an annual charge of 1.5%" is not very explicit. Whose ISA are you talking about? The Vanguard ISA has an annual charge of 0.15%, which is a big improvement on 1.5%. Even so, after five years, at £20K per year, you would have £100K in the account, even without any of the growth that you hope to achieve. 0.15% of £100K is £150. Ouch. If you do use the Vanguard ISA, you would not pay to buy or sell open ended fund units, and you also do not pay to buy or sell ETF shares via Vanguard's daily bulk transaction. Alternatively, if you use iWeb, you do not pay any annual charge, but you do pay £5 per trade. That is £60 pa if you buy every month. iWeb would be more expensive during the first year, but should be cheaper after that.

Sorry, my mistake wrt 1.5% for the ISA. What I'm unclear about now is the ongoing charge, 0.18% for VEVE and 0.25% for VFEM...if you hold these in a Vanguard ISA, is this on top of the 0.15% ? ...Ultimately, as far as I can see, this is still cheaper than L&G products charges c 0.98% for similar tracker funds, and cheaper than other IT's. No telling what iWeb will do going forwards but could you transfer in to them possibly down the line, I would probably stop contributing at 100K and then leave for at least another 5 years

buyhighselllow wrote:

GeoffF100 wrote:"I would do this in an their ISA which carries an annual charge of 1.5%" is not very explicit. Whose ISA are you talking about? The Vanguard ISA has an annual charge of 0.15%, which is a big improvement on 1.5%. Even so, after five years, at £20K per year, you would have £100K in the account, even without any of the growth that you hope to achieve. 0.15% of £100K is £150. Ouch. If you do use the Vanguard ISA, you would not pay to buy or sell open ended fund units, and you also do not pay to buy or sell ETF shares via Vanguard's daily bulk transaction. Alternatively, if you use iWeb, you do not pay any annual charge, but you do pay £5 per trade. That is £60 pa if you buy every month. iWeb would be more expensive during the first year, but should be cheaper after that.

Sorry, my mistake wrt 1.5% for the ISA. What I'm unclear about now is the ongoing charge, 0.18% for VEVE and 0.25% for VFEM...if you hold these in a Vanguard ISA, is this on top of the 0.15% ? ...Ultimately, as far as I can see, this is still cheaper than L&G products charges c 0.98% for similar tracker funds, and cheaper than other IT's. No telling what iWeb will do going forwards but could you transfer in to them possibly down the line, I would probably stop contributing at 100K and then leave for at least another 5 years

Yes, in Vanguard you pay the 0.15% (quarterly if I remember) out of your cash balance. And the fund's take their charges out of the fund, so you don't see those explicitly.

Ultimately, as far as I can see, this is still cheaper than L&G products charges c 0.98% for similar tracker funds, and cheaper than other IT's.

Yep, vanguard are generally a pretty good deal.

No telling what iWeb will do going forwards but could you transfer in to them possibly down the line, I would probably stop contributing at 100K and then leave for at least another 5 years

Yup, I would start with Vanguard and use them until Iweb/Halifax sharedealing become cheaper. There are no transfer out costs for Vanguard.

If you're buying 2 funds per month, that's going to be £60.50 for Halifax Sharedealing or £120 a year for Iweb. One fund per month would be £36.50 for Halifax, £60 for Iweb. So Halifax starts to get cheaper after your funds are greater than £24333.

You only need about 10% VFEM to replicate the world index. It is not likely to matter very much if you are underweight in emerging markets for a few months. Topping them up once every ten months should be OK. You also do not have to invest every month during the first year. If iWeb does increase its charges, you are likely to get a free transfer out. However, using Vanguard for the first year or so makes sense, if you do not mind the extra work. You could try being very cheeky, repeatedly using Vanguard to build up a year's investments, and then transferring out, but they might get fed up with that.

Thanks folks

There is another aspect to this. Irrespective of costs, is it better to invest all in one go, yearly, quarterly or monthly? If you pick a random point in time, the stock market has been more likely to fall than to rise over the next five years. On average, it would have been better to invest in one go. By the same token, investing yearly in advance would, on average, have been better than investing quarterly in advance, which would have been better than investing monthly in advance.

I believe that your best bet, if you want to spread your investment over five years is to invest yearly, or at most quarterly in advance, using iWeb.

GeoffF100 wrote:There is another aspect to this. Irrespective of costs, is it better to invest all in one go, yearly, quarterly or monthly? If you pick a random point in time, the stock market has been more likely to fall than to rise over the next five years. On average, it would have been better to invest in one go. By the same token, investing yearly in advance would, on average, have been better than investing quarterly in advance, which would have been better than investing monthly in advance.

I believe that your best bet, if you want to spread your investment over five years is to invest yearly, or at most quarterly in advance, using iWeb.

I will get my pipe and hot towels out and calculate the different platform costs based on different investing frequency.

buyhighselllow wrote:I'm sort of decided I want to invest in a Global tracker, and have been attracted to Vanguard. My wife does have an account with L&G but charges seem much higher for this type of product.
I would do this in an their ISA which carries an annual charge of 1.5%

However I'm reluctant to lump it all in, would prefer a smaller lump sum and then drip feed into VEVE charge 0.18% and VFEM, 0.25%, as this seems cheaper. However there seems to be a cost to trade on a monthly basis and I cannot figure this out seemingly without signing up ?

Any advice, could this be achieved more cheaply elsewhere, would drip feeding make it way too expensive, would I be better doing a similar thing via another platform or even using my wife's L&G account ? I'm looking to feed in c20K per year

If I understand correctly you are using L&G as your ISA provider, and they are charging 1.5% annually (plus any other fees), and you'd quite like to select a Vanguard index tracker. If so this looks very expensive and you are far better off either:

a) going direct to Vanguard, eliminating L&G; or
b) using a low cost provider to access Vanguard.

Personally I do b) but that's because I also invest in individual shares. It sounds like you would be better off doing a). I appreciate I have come at your question a slightly different way than the other responses which is why I am commenting.

As to which of the very many Vanguard index trackers to use, personally I hold about varying amounts of VWRL, VERX, VAPX, VUKE. That allows me to target my exposure more than if I just lobbed everything into VWRL.

Regards, dspp

dspp wrote:

buyhighselllow wrote:I'm sort of decided I want to invest in a Global tracker, and have been attracted to Vanguard. My wife does have an account with L&G but charges seem much higher for this type of product.
I would do this in an their ISA which carries an annual charge of 1.5%

However I'm reluctant to lump it all in, would prefer a smaller lump sum and then drip feed into VEVE charge 0.18% and VFEM, 0.25%, as this seems cheaper. However there seems to be a cost to trade on a monthly basis and I cannot figure this out seemingly without signing up ?

Any advice, could this be achieved more cheaply elsewhere, would drip feeding make it way too expensive, would I be better doing a similar thing via another platform or even using my wife's L&G account ? I'm looking to feed in c20K per year

If I understand correctly you are using L&G as your ISA provider, and they are charging 1.5% annually (plus any other fees), and you'd quite like to select a Vanguard index tracker. If so this looks very expensive and you are far better off either:

a) going direct to Vanguard, eliminating L&G; or
b) using a low cost provider to access Vanguard.

Personally I do b) but that's because I also invest in individual shares. It sounds like you would be better off doing a). I appreciate I have come at your question a slightly different way than the other responses which is why I am commenting.

As to which of the very many Vanguard index trackers to use, personally I hold about varying amounts of VWRL, VERX, VAPX, VUKE. That allows me to target my exposure more than if I just lobbed everything into VWRL.

Regards, dspp

Yes your assumptions are correct. I feel a Global tracker ( developed world ) plus Emerging markets keeps price down both because of their lesser combined fees and number of trades. I may consider putting a small amount into the global bond fund also but I'm not sure if that is available via iWeb, so something else to throw into the mix.

Vanguard's Global Bond Fund is available with iWeb. You need to look in the Vanguard IRE menu. Fidelity Index World Fund P (GB00BJS8SJ34) OCF 0.13% is cheaper than VEVE, by the way.