Opening a S&S ISA and picking funds

[bitchstewie]

Kingdom35 said:

Ok so if I want to pay in an amount each month of £250 are you saying I need to pay 0.25% each time or £5 as its a "trade" or when you say trade this is if I added a fund into my account portfolio?

No it depends.

The 0.25% is ongoing as a management charge, think interest on a bank balance but in reverse.

If they charge per trade you pay £5 if you buy £100 worth of a fund or £10,000 worth of a fund.

So if you top up 10 funds each month that's £50/month x 12 months = £600/year just in purchase fees so in that example the 0.25% ongoing might be cheaper for you.

If you go out on May 1st and buy £20k of a single fund and do nothing more for 12 months then £5 is a bargain.

[Kingdom35]

bhstewie said:

No it depends.

The 0.25% is ongoing as a management charge, think interest on a bank balance but in reverse.

If they charge per trade you pay £5 if you buy £100 worth of a fund or £10,000 worth of a fund.

So if you top up 10 funds each month that's £50/month x 12 months = £600/year just in purchase fees so in that example the 0.25% ongoing might be cheaper for you.

If you go out on May 1st and buy £20k of a single fund and do nothing more for 12 months then £5 is a bargain.

Aggh I'm with you, stick to the 0.25% for me and no trade/top up fees.
Thanks, I'm going to be drip feeding in money each month so £5 each time will kill any interest I may make on the funds

[xeny]

Kingdom35 said:

Aggh I'm with you, stick to the 0.25% for me and no trade/top up fees.
Thanks, I'm going to be drip feeding in money each month so £5 each time will kill any interest I may make on the funds

I try and think of it as return or growth - interest to me implies rather more certainly than there is.

Changeover cost wise if you manage things so it's a single trade each month is £24,000 between £5/month to trade vs .25% holding fee.

[Kingdom35]

xeny said:

I try and think of it as return or growth - interest to me implies rather more certainly than there is.

Changeover cost wise if you manage things so it's a single trade each month is £24,000 between £5/month to trade vs .25% holding fee.

Yes makes total sense that £24k 0.25% is £60 = 12 trades. But I'm just starting off so my pot is well below this, so the % is the route to go for me :-)

Thank you, all starting to make more and more sense strategy wise :-)

[Kingdom35]

Whats peoples thoughts on ishares emerging markets equity index? A belief in the Chinese growth market?

Contemplating a small investment in this fund

[sidicks]

Kingdom35 said:

Whats peoples thoughts on ishares emerging markets equity index? A belief in the Chinese growth market?

Contemplating a small investment in this fund

1. IShares are normally good cheap products to access market beta
2. I’m not familiar with this particular ETF
3. It’s suitability will depend on your existing exposures and your tolerance for risk
4. With a long investment time horizon, emerging markets would be expected to deliver good returns

[ScotHill]

Another piggyback question - I'm likely to be always earning as a basic taxpayer, and likely to be taking a retirement income (in whatever form) as a basic tax payer. Given that, is there any benefit in paying into a SIPP vs a S&S ISA, if I won't want the money until 60ish?

I guess it gets taxed at basic rate either on the way in or on the way out, but tax-free on the way in means there's 20% more money to grow as an investment so proportionally the gains will be higher in a SIPP?

[sidicks]

ScotHill said:

Another piggyback question - I'm likely to be always earning as a basic taxpayer, and likely to be taking a retirement income (in whatever form) as a basic tax payer. Given that, is there any benefit in paying into a SIPP vs a S&S ISA, if I won't want the money until 60ish?

I guess it gets taxed at basic rate either on the way in or on the way out, but tax-free on the way in means there's 20% more money to grow as an investment so proportionally the gains will be higher in a SIPP?

The benefits are smaller in your situation, but from a tax perspective there is still a benefit as you will get full tax relief in the way in but, because of your personal allowance, you may not be taxed on the whole lot when you receive the proceeds.

Not being able to access the money until retirement is good and bad depending on your personality! An ISA would give you access to your money, but this can tempt people to spend it on things they don’t need!

[xeny]

ScotHill said:

Another piggyback question - I'm likely to be always earning as a basic taxpayer, and likely to be taking a retirement income (in whatever form) as a basic tax payer. Given that, is there any benefit in paying into a SIPP vs a S&S ISA, if I won't want the money until 60ish?

I guess it gets taxed at basic rate either on the way in or on the way out, but tax-free on the way in means there's 20% more money to grow as an investment so proportionally the gains will be higher in a SIPP?

If you're under 40 a S&S LISA is effectively basic rate tax rebated on the way in, and tax free on the way out, but you're stuck until you turn 60.

[Kingdom35]

sidicks said:

1. IShares are normally good cheap products to access market beta
2. I’m not familiar with this particular ETF
3. It’s suitability will depend on your existing exposures and your tolerance for risk
4. With a long investment time horizon, emerging markets would be expected to deliver good returns

Thank you, food for thought. I'm building up my research. I'm possibly going to go for a few tracker funds as counter balance to this.

[Kingdom35]

Any cheap to trade share platforms recommended, I may dabble in a £500 purchase of CPI at some point soon? Not going to be more than 3/4 trades per year...so nice and cheap transaction fee, would be my ideal?

Any experiences or recommendations welcome

Cavendish informed me this morning theyre looking to have this facility this year, but I cant wait around.
Signed up with Cavendish today, they use the Fidelity platform, had a nightmare setting up.
Hey ho....sorted now.
Split my funds

55% - Vanguard Lifestrategy 60%
28% - Fundsmith
17% - ishare emerging market equity Index - Asia

Lets see what happens :-)

[bitchstewie]

Annoyingly I just got back from the PO having had to get documents certified to send to Fidelity to prove I am who I say I am as they couldn't "verify" me when setting up my ISA with them (via Cavendish).

[xeny]

Look at it this way - having to get the documents verified has probably saved you 2 or 3 %

[bitchstewie]

Kingdom35 said:

Any cheap to trade share platforms recommended, I may dabble in a £500 purchase of CPI at some point soon? Not going to be more than 3/4 trades per year...so nice and cheap transaction fee, would be my ideal?

Any experiences or recommendations welcome

Cavendish informed me this morning theyre looking to have this facility this year, but I cant wait around.
Signed up with Cavendish today, they use the Fidelity platform, had a nightmare setting up.
Hey ho....sorted now.
Split my funds

55% - Vanguard Lifestrategy 60%
28% - Fundsmith
17% - ishare emerging market equity Index - Asia

Lets see what happens :-)

I would say don't panic. Easy said when it's someone else's money but there's a few threads on here and other finance forums by new investors who have put money in and are spooked because "after a month it's down".

Grand old Duke of York or walking uphill whilst playing with a yoyo is how I've heard it described

[Kingdom35]

bhstewie said:

Annoyingly I just got back from the PO having had to get documents certified to send to Fidelity to prove I am who I say I am as they couldn't "verify" me when setting up my ISA with them (via Cavendish).

Yup absolute nightmare that Cavendish system. It feeds through to Fidelity, I received a technical code and when I range fidelity they couldn't fix it so wanted to send the application form to me.

[Kingdom35]

bhstewie said:

I would say don't panic. Easy said when it's someone else's money but there's a few threads on here and other finance forums by new investors who have put money in and are spooked because "after a month it's down".

Grand old Duke of York or walking uphill whilst playing with a yoyo is how I've heard it described

Which aspect should I be spooked by? What ive invested in? Can you send me the threads please so I can read them :-)

[bitchstewie]

Kingdom35 said:

Which aspect should I be spooked by? What ive invested in? Can you send me the threads please so I can read them :-)

Places like the Moneysavingexpert forums.

BBC headline is markets "plunging" so people get spooked and think they've lost lots of money there and then v it being a "moment in time" valuation if that makes sense.

[Kingdom35]

So whats everyones outlook now then? Still invest or ride it out for a few weeks? I have £500 to place in a Fund...not sure what one to go for :-)

[bitchstewie]

Kingdom35 said:

So whats everyones outlook now then? Still invest or ride it out for a few weeks? I have £500 to place in a Fund...not sure what one to go for :-)

I just kicked my ISA off with a few £k as now it's open there's never a "right" time given you don't know what's around the corner in either direction.

[Kingdom35]

bhstewie said:

I just kicked my ISA off with a few £k as now it's open there's never a "right" time given you don't know what's around the corner in either direction.

Fair point, long term view youre going to experience a few rollercoaster rides.

Ive just bought into Nanoco