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IT vs OEIC for growth

Investment discussion for beginners. Why you should invest your money, get help getting started
iambic
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IT vs OEIC for growth

#241059

Postby iambic » August 1st, 2019, 2:01 pm

When debating whether to buy an IT, or an OEIC that looks to invest in similar areas (according to the TrustNet comparison tool, they're pretty closely correlated), I'm going round in circles & would appreciate your thoughts.

I'm investing for growth at the moment (& am likely to still be for the next 10 years or so), so having dividends automatically bundled back into an accumulation fund seems the more straightforward option. Also, they generally seem to be cheaper to hold.

Having read a lot about them & how they're managed, I like the idea of investing in IT's & how they can be used to generate an income via dividends, but don't really want to have to switch from fund to IT down the line when I need to draw that income. I'm investing using iWeb & they charge 2% to reinvest IT dividends for you. I could do it myself by bundling it up with other money I'm paying in, but probably wouldn't end up putting it back into the IT it came from, which will adversely affect returns from that IT.

So it sounds like a fund is the way forward....but I'm still keen on IT's & find myself trying to find reasons to invest in them! :)

monabri
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Re: IT vs OEIC for growth

#241093

Postby monabri » August 1st, 2019, 5:14 pm

iambic wrote: I'm investing using iWeb & they charge 2% to reinvest IT dividends for you. I could do it myself by bundling it up with other money I'm paying in, but probably wouldn't end up putting it back into the IT it came from, which will adversely affect returns from that IT.

So it sounds like a fund is the way forward....but I'm still keen on IT's & find myself trying to find reasons to invest in them! :)


Being in control of where dividends are reinvested I find preferable...I decide what to do with the funds, reinvest in the same fund, expand the portfolio, sit on the cash or withdraw it.

iambic
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Re: IT vs OEIC for growth

#241283

Postby iambic » August 2nd, 2019, 1:21 pm

monabri wrote:Being in control of where dividends are reinvested I find preferable...I decide what to do with the funds, reinvest in the same fund, expand the portfolio, sit on the cash or withdraw it.


Thanks monabri, I think your preferred method is probably what will suit me as well. I'm new to using iWeb (having only used Vanguard & Fidelity previously) so I'm probably overthinking how to handle dividends because of the fee charged per trade.

Lootman
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Re: IT vs OEIC for growth

#241317

Postby Lootman » August 2nd, 2019, 3:34 pm

monabri wrote:
iambic wrote: I'm investing using iWeb & they charge 2% to reinvest IT dividends for you. I could do it myself by bundling it up with other money I'm paying in, but probably wouldn't end up putting it back into the IT it came from, which will adversely affect returns from that IT.

So it sounds like a fund is the way forward....but I'm still keen on IT's & find myself trying to find reasons to invest in them! :)

Being in control of where dividends are reinvested I find preferable...I decide what to do with the funds, reinvest in the same fund, expand the portfolio, sit on the cash or withdraw it.

It's also preferable if your account is a taxable account, as those automatic reinvestments have to be accounted for in the cost basis. Keeping track of that causes more work and scope for error.

iambic
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Re: IT vs OEIC for growth

#241759

Postby iambic » August 5th, 2019, 8:47 am

Lootman wrote:
monabri wrote:Being in control of where dividends are reinvested I find preferable...I decide what to do with the funds, reinvest in the same fund, expand the portfolio, sit on the cash or withdraw it.

It's also preferable if your account is a taxable account, as those automatic reinvestments have to be accounted for in the cost basis. Keeping track of that causes more work and scope for error.


Thanks Lootman. The money will all be in an ISA which hopefully should reduce those complications, but it's a good point to bear in mind.


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