Which Low Cost Trackers?

[dphiggins007]

Hi all,

I currently have most of my pension and ISA investments under a financial adviser via Fidelity platforms. Overall fees are circa 2% pa which includes 1% adviser fee.

I’m not happy that I pay the 2% on full fund value even when there is no growth (currently losses). I am considering moving the investments to DIY low cost trackers either via Vanguard or Interactive Investor platforms.

Any advice on best platform and which low cost trackers I should go for? I am 47 and plan to retire in 10 years so am looking for something I can just contribute to and forget until I retire. If I stay where I am fees will be in excess of £100k over next 10 years. Seems excessive and I would prefer a Porsche ☺️

Thanks

[ILikeCake]

The excellent Monevator blog has recently posted about the best low cost trackers.

https://monevator.com/low-cost-index-trackers/

If you dig around they also have a post listing different platforms and under which circumstances one is better than the other.

Fyi. I moved from fidelity to vanguard years ago. Have saved a lot on fees and the 'buy and forget' LifeStrategy funds suit me.

[Simpo Two]

ILikeCake said:

Fyi. I moved from fidelity to vanguard years ago. Have saved a lot on fees and the 'buy and forget' LifeStrategy funds suit me.

The only downside is that you can only have Vanguard products on the Vanguard platform. But if that's all you want, no problem.

They've also started TV advertising, which always worries me a bit because then I wonder why they need to...

[JC06]

Simpo Two said:

ILikeCake said:

Fyi. I moved from fidelity to vanguard years ago. Have saved a lot on fees and the 'buy and forget' LifeStrategy funds suit me.

The only downside is that you can only have Vanguard products on the Vanguard platform. But if that's all you want, no problem.

They've also started TV advertising, which always worries me a bit because then I wonder why they need to...

Not sure that's true, I know you can buy Vanguard funds through AJBell as I have some in various accounts I have with them.

https://www.youinvest.co.uk/search/all/vanguard

[danpalmer1993]

JC06 said:

Not sure that's true, I know you can buy Vanguard funds through AJBell as I have some in various accounts I have with them.

https://www.youinvest.co.uk/search/all/vanguard

I think you are looking at it the opposite way as to what was said. Not that you can only buy vanguard funds through the vg platform and not from other platforms, but that you can only buy vg funds and not UBS, HSBC funds through the vg platform.

[VR99]

I use Vanguard for my S&SISA and Fidelity for my SIPP....and AJ BELL for my LISA.

Fidelity have capped platform fees for ETFs and I also receive a small employer discount.....HMWO or VEVE would be my choices for cheap dev world global trackers if you went down that route....maybe VWRL if you wanted All World.

[Derek Chevalier]

Simpo Two said:

They've also started TV advertising, which always worries me a bit because then I wonder why they need to...

To make more people aware of their offering and help give better investor outcomes I'd assume.

"Our core purpose is simple—to take a stand for all investors, to treat them fairly, and to give them the best chance for investment success."

[JC06]

danpalmer1993 said:

I think you are looking at it the opposite way as to what was said. Not that you can only buy vanguard funds through the vg platform and not from other platforms, but that you can only buy vg funds and not UBS, HSBC funds through the vg platform.

You're absolutely correct. Apologies Simpo Two.

More haste, less speed.

[dphiggins007]

ILikeCake said:

The excellent Monevator blog has recently posted about the best low cost trackers.

https://monevator.com/low-cost-index-trackers/

If you dig around they also have a post listing different platforms and under which circumstances one is better than the other.

Fyi. I moved from fidelity to vanguard years ago. Have saved a lot on fees and the 'buy and forget' LifeStrategy funds suit me.

Do you just purchase one Lifestyle fund or do you spread things a little : one third FTSE, one third S&P and one third lifestyle for example ?

[thekingisdead]

Platform - choose one that best suits your portfolio size / trading style (frequent / infrequent etc)

Sounds like your portfolio is a reasonable size so would suggest a fixed fee would be better than a percentage based fee (such as platform size)

As for the funds themselves - there are lots of players, vangaurd, ishares, hsbc, LGIM etc.

Just check the nomenclature- some use different wording for developed world / all cap (some do and some dont include emerging markets)
The vanguard global all cap is the broadest equity tracker I’ve found from my research - some 6500 holdings. It’s at the top end of cost tho (for a tracker) circa 30bps per annum


The life strategy are very much a one stop shop - if you don’t want to mess around with owning multiple funds.
They do include a fair chunk of home bias (to UK) which you may or may not be comfortable with.
Still a popular product for those that want to make there investments as simple as possible.

[Derek Chevalier]

thekingisdead said:

The vanguard global all cap is the broadest equity tracker I’ve found from my research - some 6500 holdings. It’s at the top end of cost tho (for a tracker) circa 30bps per annum

EM and small cap tend to be more expensive - as you say, important to dig under the hood and understand exactly what you are getting.

[ILikeCake]

dphiggins007 said:

ILikeCake said:

The excellent Monevator blog has recently posted about the best low cost trackers.

https://monevator.com/low-cost-index-trackers/

If you dig around they also have a post listing different platforms and under which circumstances one is better than the other.

Fyi. I moved from fidelity to vanguard years ago. Have saved a lot on fees and the 'buy and forget' LifeStrategy funds suit me.

Do you just purchase one Lifestyle fund or do you spread things a little : one third FTSE, one third S&P and one third lifestyle for example ?

I chuck a bit in their global tracker (VWRL?) now and again, as someone on here once casually mentioned the LifeStrategy funds are quite weighty UK-wise. And everyone knows it's best to make important long-term financial decisions based on car forum hearsay!

[bitchstewie]

For Lifestrategy IWEB is probably as cheap as you'll get it all-in on a large pot.

https://www.vanguardinvestor.co.uk/financial-advic...

might be worth looking at too depending how comfortable you are to go it alone.

[Simpo Two]

Derek Chevalier said:

Simpo Two said:

They've also started TV advertising, which always worries me a bit because then I wonder why they need to...

To make more people aware of their offering and help give better investor outcomes I'd assume.

"Our core purpose is simple—to take a stand for all investors, to treat them fairly, and to give them the best chance for investment success."

Mission statements are words on paper written by marketing people.

Platform-wise I considered Vanguard over Fidelity - they were very nice, answered the phone, answered all the questions etc - but I have many non-Vanguard investments, whereas I can hold Vanguard funds on the Fidelity platform where there's almost limitless choice.

[Derek Chevalier]

Simpo Two said:

Mission statements are words on paper written by marketing people.

Maybe, but everyone I've dealt with at Vanguard shares those views.

[bitchstewie]

Simpo Two said:

The only downside is that you can only have Vanguard products on the Vanguard platform. But if that's all you want, no problem.

They've also started TV advertising, which always worries me a bit because then I wonder why they need to...

How often do you come on here and see people basically saying "I want to invest where the hell do I start?"?

That's why Vanguard are advertising and given they have a damned good product for many people they're exactly the sort of offering they should be looking at.

[Simpo Two]

bhstewie said:

How often do you come on here and see people basically saying "I want to invest where the hell do I start?"?

That's why Vanguard are advertising and given they have a damned good product for many people they're exactly the sort of offering they should be looking at.

That makes sense, and better than eToro I suggest. Filling the advice gap.

Vanguard may be an exception but in general I'm curious about companies that never advertised before suddenly advertising. Old customers leaving, debts to pay off, key people bailing out...?

[supersport]

They are all at it on TV at the moment.

I imagine part of it is because a lot of people saved money over Covid and they would like some of it. Maybe they see a large untapped customer base.

I don’t quite get equating advertising with something dodgy going on. You even see adverts for things that normal people don’t / can’t buy e.g, Battle Tanks

[bitchstewie]

Simpo Two said:

That makes sense, and better than eToro I suggest. Filling the advice gap.

Vanguard may be an exception but in general I'm curious about companies that never advertised before suddenly advertising. Old customers leaving, debts to pay off, key people bailing out...?

Bottom line is they all want you money and to be fair if Robinhood suddenly came to the UK and started advertising I'd be wary of their motives as I don't think they have the same goal of helping people invest (v trade) that Vanguard do.

As you say though the advice gap plus cost of living crisis and general ignorance means there's a market out there of people who presumably want to do something to help themselves but simply don't know where to start.

Go back a few years and that would probably have cost them a couple of percent a year and now many of them can get most of that for a few bps.

[chip*]

Simpo Two said:

Vanguard may be an exception but in general I'm curious about companies that never advertised before suddenly advertising. Old customers leaving, debts to pay off, key people bailing out...?

I assume you share the same view on the firms advertising/sponsoring the Pistonheads site?