FTSE All Share Index Tracker ISA

[Dynamo]

Hello All,

New member, first post, give me a kicking, I can take it...

I have no investments, heck at middle age I've just about learned to live within my means. Risk averse, no debt, I was thinking of taking out an FTSE All Share Index Tracker ISA as a starter.

First question - given my complete lack of time to watch over an investment, and general ignorance to investing, anyone care to tell me that I should be considering something other than an UK all-share over the long term?

Second question, how do I actually sign up for it, endless circular searches on t'internet seem to lead to dead ends - do I have to go and actually see an IFA to get one? (Surely not?)

Any thoughts appreciated!

Cheers
D

[Alaric]

Second question, how do I actually sign up for it, endless circular searches on t'internet seem to lead to dead ends - do I have to go and actually see an IFA to get one? (Surely not?)

It's a problem of two parts.

You first take out a "Stocks & Shares ISA". There are numerous providers, most allow you to create your ISA account online.

Having set up your ISA, you then transfer money to it, up to £ 20,000 a year. You then decide what to invest in. In your case, you just have to decide between the several funds offering FTSE All Share Trackers.

[OLTB]

First question - given my complete lack of time to watch over an investment, and general ignorance to investing, anyone care to tell me that I should be considering something other than an UK all-share over the long term?

Hi Dynamo

Some investors think that not limiting yourself to the UK might be a good thing and that something like the Vanguard LifeStrategy funds that offer worldwide exposure with the mix of shares and bonds down to your personal preference and comfort factor. Vanguard do all the work so there's no decision making on your part in terms of what shares to invest into and there's more information here https://www.vanguardinvestor.co.uk/inve ... tegy-funds

As Alaric suggested, many online providers should give you this option (including Vanguard themselves!) and you don't need an IFA to set this up.

Note that this isn't advice and you should do your own research to see what you are happy investing into.

Cheers, OLTB.

[argoal]

Second question, how do I actually sign up for it, endless circular searches on t'internet seem to lead to dead ends - do I have to go and actually see an IFA to get one? (Surely not?)

This link to a Monevator guide to buying your first tracker should be of help.

http://monevator.com/how-to-buy-index-trackers/

There is a link to the comparison table for various platforms that are available and various other useful guides.

I was thinking of taking out an FTSE All Share Index Tracker ISA as a starter.

Given your risk averse nature you might be better suited with something that includes a proportion of bonds as well as stocks in the mix to reduce volitility (i.e. big drops in value).

Try this page, again from Monevator, for a ready solution.

http://monevator.com/vanguard-lifestrategy/

If you have more time to research then another Monevator page would be a great place to start.

http://monevator.com/category/investing/passive-investing-investing/

It has links to a dozen or so articles on various aspect of passive investing.

You will probably have worked out by now that I regard the Monevator site as an excellent resource for investment education.

Good luck whatever you decide to do.

[JohnB]

Its a good choice for a straight tracker. Life Strategy funds have more complicated goals, and higher charges.

Vanguard, iShares, Fidelity, HSBC all offer FTSE all share trackers. http://monevator.com/low-cost-index-trackers/ is a good starting point.

You can choose either funds or ETFs. The latter can be cheaper because brokers have different charging schemes for them. All ETFs and INC (income) funds will pay out dividends a few times a year, so you will have to arrange to reinvest them. ACC (accumulating) funds keep the dividends internally, so need less work.

You will need a Broker. Names like Hargreaves Lansdown, iWeb etc. http://monevator.com/compare-uk-cheapest-online-brokers compares them. Iweb for example won't charge for ETFs in an ISA, but will for funds.

You don't need an IFA. If you do feel you need one, its often better to have one that charges a flat fee, rather than ongoing charges on the investments.

[TUK020]

Would agree that Monevator is a good place to start reading. All of the links suggested above are worth trawling through.

ISA wrapper is a sound starting point to ensure that you are protected against both Capital and Income taxes.

Need to decide whether you are looking for income from this to start with or are building accumulation (I assume the latter). Also good to get a feel for what your investment horizon is. If you are looking to rely on this money within 2 years, the stock market is possibly not the right option (too much risk of it having a dip when you want to cash out). >10 years definitely the right place to invest.

Trackers are a good place to start for long term accumulation. Need to decide whether you are wanting UK centric, or a more Global position. FTSE100 is pretty international - 2/3 of earnings are overseas. FTSE350 is smaller company based, which means it s more UK focused (also higher likely in but more volatile). For long term, you probably want mix, and definitely some global exposure

Once you have read up, worked out a plan of action, you can then get more detailed fb here. Very good exercise to write up your objectives, and investment plan, even if you do't share it with anyone.

[mc2fool]

Iweb for example won't charge for ETFs in an ISA, but will for funds.

No they don't. https://www.iweb-sharedealing.co.uk/cha ... harges.asp

[Dynamo]

Thanks All,

Plenty to chew on there and a healthy kick in the right direction.

Cheers
D

[Dynamo]

Having done just a little bit of reading up via the links kindly provided, I find myself wondering how I might compare the performance to date of one/all of these Vanguard Life Strategy trackers against an all share Or a FTSE 250/100 whatever.

I appreciate past performance is not necessarily an indicator of future performance, especially over a short term but I would like to see the trends side by side nonetheless.


Where would a fool go to find this?


Many thanks,

D

[BrummieDave]

Most platform providers and other websites provide a comparison tool that will do this.

For example, look at www.hl.co.uk and search for Lifestrategy 100% Equity, then use the 'Charts and Performance' tab to compare with other Lifestrategy Equity mixes, FTSE indices, or indeed any share, fund etc.

It's really simple, any fool can do it.