Advice

[Lochaber]

I recently started a S&S ISA VLS 80 back in March ( two weeks before the big drop but hey ho I in it for the long term ) with a lump sum plus a monthly contribution.

Becaus of lock down I was a bit bored so decide to empty my jar of change and shrapnel at my bedside table which had been building up for the last 3/4 years. It came to just under £500 which is a nice wee bonus, amazing how small change adds up.

I have two options that I thought for this, put it into the VLS80 or putting it into RDSB. I not lookig to make a quick return on this just let it sit there and work away. My reason for RDSB is that share price looks pretty low and over the next couple of years that could move a bit more than if it was in was in my ISA, I could always take it out move it into my ISA. Would be doing this with T212. I have a very small account with them which I use for fun. Already have a decent chunk of PB's

Any advice would be most welcome or is there something else I should do with it. It really free money but I thinking it better in some shares that sitting beside my bed.

Thanks in advance

p.s. I have read this section for the last couple of years and it was from this that I started my ISA rather than pi**ing it against the wall. It been a great source of information and insight how to make your money work a lot better for you. Maybe one day I will have built up enough to move it across to Julien

[Phooey]

I have some VLS too. The only issue with this is it's UK biased, so given the recent headlines something like VWRL might be a better gamble.

[Lochaber]

Phooey said:

I have some VLS too. The only issue with this is it's UK biased, so given the recent headlines something like VWRL might be a better gamble.

So I could open a differnt fund with Vanguard still in my ISA wrapper ? very new to this as you can probably tell.

[VR99]

Phooey said:

I have some VLS too. The only issue with this is it's UK biased, so given the recent headlines something like VWRL might be a better gamble.

Hope the OP doesn't mind me asking a qu here but do.you have any idea if there is much overlap in terms of global.coverage between VLS 100 and VWRL? Wondering if it's worthwhile or not having both...

[Phooey]

Lochaber said:

So I could open a differnt fund with Vanguard still in my ISA wrapper ? very new to this as you can probably tell.

Yes. For example - I have an account directly with Vanguard (Vanguard only do their own funds - approx 60-70 I think?) and currently buy monthly by DD VLS80 and VWRL. I also have a bit of their FTSE and S&P trackers in there as well which I dropped lump sums into when the recent downturn started. The only adjustment I'm thinking of doing is switching the monthly DD from VLS to adding more to VWRL. I'm trying to reduce my UK exposure, for obvious reasons. I will keep an eye on VLS though, it will be interesting to see if Vanguard change their UK weighting within the LS funds..

[Phooey]

VR99 said:

Hope the OP doesn't mind me asking a qu here but do.you have any idea if there is much overlap in terms of global.coverage between VLS 100 and VWRL? Wondering if it's worthwhile or not having both...

Portfolio data:

https://www.vanguardinvestor.co.uk/investments/van...

https://www.vanguardinvestor.co.uk/investments/van...

In my very limited knowledge - VWRL is a better representation of a 'global' tracker. LS100 is UK biased whereas VWRL is only 4%

[i4got]

Phooey said:

VR99 said:

Hope the OP doesn't mind me asking a qu here but do.you have any idea if there is much overlap in terms of global.coverage between VLS 100 and VWRL? Wondering if it's worthwhile or not having both...

Portfolio data:

https://www.vanguardinvestor.co.uk/investments/van...

https://www.vanguardinvestor.co.uk/investments/van...

In my very limited knowledge - VWRL is a better representation of a 'global' tracker. LS100 is UK biased whereas VWRL is only 4%

And bear in mimd that VWRL is an ETF whereas LS100 is a fund.

[Phooey]

i4got said:

And bear in mimd that VWRL is an ETF whereas LS100 is a fund.

^^^ Ok so this is where my knowledge is limited

Tell me the difference, or pros and cons of each please!

[i4got]

Phooey said:

i4got said:

And bear in mimd that VWRL is an ETF whereas LS100 is a fund.

^^^ Ok so this is where my knowledge is limited

Tell me the difference, or pros and cons of each please!

You trade an ETF like a stock. Its listed, you can only trade when the market is open, it has a fluctuating price and you execute a trade just like with a stock - you get a price then the trade is instantaneous.

When you buy or sell a fund the actual transaction is not normally visible to you - it can take place over a couple of days and you get the price ate the end where the order is complete.

As an example I may decide to buy an ETF today while prices are down and I can take advantage of the low prices.

If I decided to buy a fund today the execution could actually take place tomorrow after the stock market has risen so I can't quickly react to market moves.

With a simple ETF like VWRL there is not a lot of difference between it and an open ended fund other than the way its traded as detailed above.

However there are more complex ETFs that use leverage (where it buys 2 or 3 times the return for the same investment cost) or shorts (which pay you if the markets go down) which are higher risk and a bit more like derivatives. I wouldn't go poking around in those unless you know what you're doing or get advice.

The other difference is the costs. Generally executing and holding an ETF is cheaper than doing the same with a fund. If you use HL you can type in the fund code or the ETF code and see the different costs. It varies but with HL...

VWRL costs 0.45% to hold for a year with a cap at £200 (in a SIPP). Its costs 11.95 each trade.

LS is charged at 0.45 on your first £250k, 0.25% on the £250k to £1m tier and 0.1% from £1m to £2m. I believe execution charges are free.

So the difference in charges on a £1m portfolio could easily be about £3k a year. Obviously this depend on your investment size.

[Phooey]

i4got said:

You trade an ETF like a stock. Its listed, you can only trade when the market is open, it has a fluctuating price and you execute a trade just like with a stock - you get a price then the trade is instantaneous.

When you buy or sell a fund the actual transaction is not normally visible to you - it can take place over a couple of days and you get the price ate the end where the order is complete.

As an example I may decide to buy an ETF today while prices are down and I can take advantage of the low prices.

If I decided to buy a fund today the execution could actually take place tomorrow after the stock market has risen so I can't quickly react to market moves.

With a simple ETF like VWRL there is not a lot of difference between it and an open ended fund other than the way its traded as detailed above.

However there are more complex ETFs that use leverage (where it buys 2 or 3 times the return for the same investment cost) or shorts (which pay you if the markets go down) which are higher risk and a bit more like derivatives. I wouldn't go poking around in those unless you know what you're doing or get advice.

The other difference is the costs. Generally executing and holding an ETF is cheaper than doing the same with a fund. If you use HL you can type in the fund code or the ETF code and see the different costs. It varies but with HL...

VWRL costs 0.45% to hold for a year with a cap at £200 (in a SIPP). Its costs 11.95 each trade.

LS is charged at 0.45 on your first £250k, 0.25% on the £250k to £1m tier and 0.1% from £1m to £2m. I believe execution charges are free.

So the difference in charges on a £1m portfolio could easily be about £3k a year. Obviously this depend on your investment size.

Excellent - thank you for the explanation! To be honest I've Googled the differences before and it goes over the top of my head!

Unless I've misunderstood - the best (cheapest) way to hold VWRL is possibly direct via Vanguard? Again, if I've understood it - total costs for VWRL via Vanguard is 0.15% + 0.22% = 0.37%? I drip £500 monthly by Direct-Debit. Is there any other (hidden) costs I've not accounted for?

Am I right in also thinking with VWRL being an ETF, it might be an idea to manually contribute (purchase) rather than rely on the Direct-Debit on a set date each month..

Thanks again

[i4got]

Phooey said:

Excellent - thank you for the explanation! To be honest I've Googled the differences before and it goes over the top of my head!

Unless I've misunderstood - the best (cheapest) way to hold VWRL is possibly direct via Vanguard? Again, if I've understood it - total costs for VWRL via Vanguard is 0.15% + 0.22% = 0.37%? I drip £500 monthly by Direct-Debit. Is there any other (hidden) costs I've not accounted for?

Am I right in also thinking with VWRL being an ETF, it might be an idea to manually contribute (purchase) rather than rely on the Direct-Debit on a set date each month..

Thanks again

On costs I'm not certain. Depending on your investments levels, the caps may come into play.

If it was a fund then I'm pretty certain that Vanguard would be cheaper.

If this is an ETF in a SIPP then the £200 cap on charges at HL is lower than the £375 cap at Vanguard.

HL has a reputation for being expensive but for largish ETF holdings I find its pretty good. I did a comparison when Vanguard opened up and it wasn't worth me leaving HL .

If you aren't reaching the cap then Vanguard looks a bit cheaper.

I'd plug in into a spreadsheet with your expected investment amounts and do a quick comparison.

Regarding direct debit - in normal market times I would just use a monthly direct debit. Until normal times return personally I'd personally execute the trades.

[Phooey]

i4got said:

Regarding direct debit - in normal market times I would just use a monthly direct debit. Until normal times return personally I'd personally execute the trades.

That is exactly my thinking too!

Thanks again

[JulianPH]

Lochaber said:

p.s. I have read this section for the last couple of years and it was from this that I started my ISA rather than pi**ing it against the wall. It been a great source of information and insight how to make your money work a lot better for you. Maybe one day I will have built up enough to move it across to Julien

We will happily look after you (no minimum investment level for PHers), but Vanguard are really good too.

I agree with Phooey on the UK bias of LS and we are looking at changing our UK large cap exposure at the moment (and I know Vanguard want to do the same).

RDSA does look excellent value, but there are reasons for it being so low. It has also virtually wipped out its dividend. For a punt it could be a great long term holding at the current price, but I could not hold it in PH Equity as it really is a punt right now.

[Ean218]

Phooey said:

Portfolio data:

https://www.vanguardinvestor.co.uk/investments/van...

https://www.vanguardinvestor.co.uk/investments/van...

In my very limited knowledge - VWRL is a better representation of a 'global' tracker. LS100 is UK biased whereas VWRL is only 4%

The LS100 is 74.9% ROW so not overly UK biased.

[Simpo Two]

JulianPH said:

RDSA does look excellent value...

RDSA or RDSB? I think the former is in euros.

[Lochaber]

Simpo Two said:

RDSA or RDSB? I think the former is in euros.

That what i thought hence i mentioned RDSB.

Thanks for all the advice. Cant do much the now anyway as bank have said they can only take 10 bags per day. Going to take a few trips to get rid of this

I am likeing the the idea of more exposure to the rest of the world.

[bogie]

Simpo Two said:

JulianPH said:

RDSA does look excellent value...

RDSA or RDSB? I think the former is in euros.

They were even better a little while a go in the panic managed to pick them up sub £10 each.....when the end of the world was predicted and oil futures went negative

[JulianPH]

Sorry guys, it was just a typo!

RDSB!

[Lochaber]

Taken the plunge £500 in RDSB @1325

Now to start sweating, although I in this for at least 18 months

[Simpo Two]

Lochaber said:

Taken the plunge £500 in RDSB @1325

Now to start sweating, although I in this for at least 18 months

Well you're not investing for dividends like I did a few years ago... but we still need oil. BP's plans aren't massively encouraging though.


RDSA, RDSB... I wonder if RSPB sell petrel?