Portfolio assessment [UK]

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Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Portfolio assessment [UK]

Post by becky47 »

Hi,

Please help me assess my portfolio (UK). Info below:

Emergency funds: 34k in a savings ISA on 1.5%pa

Debt: No debt, usually 1.5-2k in expenses per month,always paid in full.

Tax Filing Status: Married

Tax Rate: 20% on property income, 7.5% on dividends up to 50k for this year (running own company)

State of Residence: UK

Age: 36

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 100% of stocks

S&S ISA c.75k
SIPP c.21k
Cash + Emergency fund c.100k
2 properties rent out, income c.30k pa
properties market value c.500k

Contributions

New annual Contributions
£200 per month in SIPP (+return 25% from government)
£1666 per month in S&S ISA (non-taxed)

Available funds

Funds available in S&S ISA(k)

6.44% ASI Asia Pacific Equity Class I - Accumulation (GBP)
0.27% BP Plc Ordinary US$0.25 *1
3.3% British American Tobacco plc Ordinary 25p *1
0.55% Coca Cola Company (The) Com Stk USD0.25 (CDI) *1 *R
0.23% Facebook Inc Com USD0.000006 *1 *R
0.81% Funding Circle PLC ORD GBP0.001 *1
11.86% Fundsmith Equity Class I - Accumulation (GBP)
10.42% JPMorgan Emerging Markets Class B - Accumulation (GBP)
7.37% Jupiter European Class I - Accumulation (GBP)
12.08% Legal & General International Index Trust Class C - Accumulation (GBP)
7.97% LF Lindsell Train UK Equity Class D - Accumulation (GBP)
1.96% LF Woodford Equity Income Class Z - Accumulation (GBP)
5.55% Merian UK Smaller Companies Class R - Accumulation (GBP)
0.69% Microsoft Corporation Comm Stk US$ 0.0000125 (Crest Depository Interest) *1 *R
0.19% Ryanair Holdings Ordinary Shares EUR0.006 *1 *R
0.07% Sirius Minerals plc Ordinary GBP 0.0025 *1
7.54% UBS Global Enhanced Equity Income Class C - Accumulation (GBP) *2
22.71% UBS S&P 500 Index Class C - Accumulation (GBP) *2

Funds available in SIPP(k)
15.5% Artemis Strategic Bond Class MI - Accumulation (GBP)
17.88% BNY Mellon Global Income Class U - Accumulation (GBP)
15.11% JPMorgan Emerging Markets Class B - Accumulation (GBP)
1.59% LF Woodford Equity Income Class Z - Accumulation (GBP)
16.37% Lindsell Train Global Equity Class D - Income (GBP)
2.52% Sirius Minerals plc Ordinary GBP 0.0025 *1
31.03% UBS S&P 500 Index Class C - Accumulation (GBP) *2

Questions:
1. Thanks for taking the time to review the above. As I'm UK based, and the instructions were targeted on US residents, I'm not sure if someone can still assess.

2. Thinking of purchaseing a house to live as renting at the moment. That's the explanation of the extra cash.

3. Am I on a good road investment-wise? Any improvements that you can see of? The plethora of funds comes from me playing around with investing, so I decided to consolidate some, and leave some as they were. I am now almost solely putting my future investments on S&P500 tracker and maybe Lindsell Train.
glorat
Posts: 677
Joined: Thu Apr 18, 2019 2:17 am

Re: Portfolio assessment [UK]

Post by glorat »

becky47 wrote: Sun Aug 18, 2019 12:34 pm 3. Am I on a good road investment-wise? Any improvements that you can see of? The plethora of funds comes from me playing around with investing, so I decided to consolidate some, and leave some as they were. I am now almost solely putting my future investments on S&P500 tracker and maybe Lindsell Train.
Boglehead principles are all about low cost investment. The first self-assessment you should do is go through every fund and find out the annual charge (TER or OCF etc.). I recommend you post the results back here as it should be an eye opener for you. IMHO, anything above 0.25% is unnecessarily expensive. You might also want to check how much your ISA platform is charging you every year on top of the fund.

https://www.bogleheads.org/wiki/UK_investing has lots of useful information

Ultimately, if I were you, I'd be looking at opening an account at a low cost ISA provider and re-register everything across and find simpler and lower cost funds.
monchan
Posts: 2
Joined: Mon Aug 19, 2019 2:51 am

Re: Portfolio assessment [UK]

Post by monchan »

Hi.
Are the funds you list ‘funds available’ or merely ones you have selected? In theory a good platform should have many more available funds.

As a first step I’d suggest looking at Vanguard and some of the free resources they have - just to familiarise yourself with all in one funds vs. specific funds/ETFs. Then go back and think about your goals and time horizons and plan accordingly
Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

Thanks for your answer. Here's the ongoing charges for the S&S only. For shares, the charge is usually 0.45% management fee and between 0.63% - 0.93% for average management fee. I only kept the funds in, as they represent the bulk of my investment.

I am with HL and I know they are on the more expensive side, I can already feel it when looking into my account. It's a consideration I had for a while, but I'm somewhat reluctant to do it (like changing a bank after 10 years).

6.44% ASI Asia Pacific Equity Class I - Accumulation (GBP) / OCF: 1.21% / Discount: 0.55% / Net ongoing: 0.66%
11.86% Fundsmith Equity Class I - Accumulation (GBP) / OCF: 0.95% / Discount: 0% / Net ongoing: 0.95%
10.42% JPMorgan Emerging Markets Class B - Accumulation (GBP) / OCF: 1.15% / Discount: 0.5% / Net ongoing: 0.65%
7.37% Jupiter European Class I - Accumulation (GBP) / OCF: 1.03% / Discount: 0% / Net ongoing: 1.03%
12.08% Legal & General International Index Trust Class C - Accumulation (GBP) / OCF: 0.13% / Discount: 0.05% / Net ongoing: 0.08%
7.96% LF Lindsell Train UK Equity Class D - Accumulation (GBP) / OCF: 0.65% / Discount: 0.14% / Net ongoing: 0.51%
1.96% LF Woodford Equity Income Class Z - Accumulation (GBP) / OCF: 0.75% / Discount: 0.25% / Net ongoing: 0.5%
5.55% Merian UK Smaller Companies Class R - Accumulation (GBP) / OCF: 1.03% / Discount: 0.18% / Net ongoing: 0.86%
7.54% UBS Global Enhanced Equity Income Class C - Accumulation (GBP) *2 / OCF: 0.72% / Discount: 0% / Net ongoing: 0.72%
22.7% UBS S&P 500 Index Class C - Accumulation (GBP) *2 / OCF: 0.09% / Discount: 0% / Net ongoing: 0.09%

Based on these, I already knew that trackers cost very low, but I read somewhere that charges 0.5% or below are ok-ish, obviously the lower the better. I think it some cases it's worth the charge. Some others not so much.

So based on the above what is the assumption?
DJN
Posts: 742
Joined: Mon Nov 20, 2017 12:30 am

Re: Portfolio assessment [UK]

Post by DJN »

Hi,
you have been given good pointers already.
FYI have a look at this product: https://www.vanguardinvestor.co.uk/what ... y-products
Any TER above 0.25% is too much unless you are looking to invest wider than standard stocks and bonds and want exposure to REITs and hedge funds using investment trusts or the like.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
glorat
Posts: 677
Joined: Thu Apr 18, 2019 2:17 am

Re: Portfolio assessment [UK]

Post by glorat »

becky47 wrote: Mon Aug 19, 2019 4:13 am I read somewhere that charges 0.5% or below are ok-ish, obviously the lower the better. I think it some cases it's worth the charge. Some others not so much.
Why/when do you think it is worth the charge? Because they outperform?
Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

glorat wrote: Mon Aug 19, 2019 4:30 am Why/when do you think it is worth the charge? Because they outperform?
I wouldn't say they outperform, instead they outperformed, and bottom line, I like their mix.
Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

monchan wrote: Mon Aug 19, 2019 2:59 am Hi.
Are the funds you list ‘funds available’ or merely ones you have selected? In theory a good platform should have many more available funds.
They're the ones I have in my portfolio.
Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

Also what's the consensus here in terms of cheapest platform for someone who mainly invests for long-term growth, and mainly on S&P500 or Global ETFs?
I am currently on HL, have checked iWeb (not that great, but I guess you need to get used to). I also know the Vanguard funds restriction.

Last, if I were to transfer my entire S&S ISA, for the products that another broker doesn't offer, do I need to sell and re-purchase via the new broker?
DJN
Posts: 742
Joined: Mon Nov 20, 2017 12:30 am

Re: Portfolio assessment [UK]

Post by DJN »

Hi,
you might consider doing some reading on Wiki and take a deeper dive into some of the issues: https://www.bogleheads.org/wiki/Outline ... _domiciles
As you are investing from UK see this part for some nuances:
https://www.bogleheads.org/wiki/Outline ... ed_Kingdom
In regards to platforms I use the following two as my mainstays:
  • Interactive Brokers
    DeGiro
They are the cheapest that I can find.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
danielbird193
Posts: 36
Joined: Thu Mar 21, 2019 2:15 pm

Re: Portfolio assessment [UK]

Post by danielbird193 »

becky47 wrote: Mon Aug 19, 2019 5:12 am Also what's the consensus here in terms of cheapest platform for someone who mainly invests for long-term growth, and mainly on S&P500 or Global ETFs?
I am currently on HL, have checked iWeb (not that great, but I guess you need to get used to). I also know the Vanguard funds restriction.

Last, if I were to transfer my entire S&S ISA, for the products that another broker doesn't offer, do I need to sell and re-purchase via the new broker?
I switched from Hargreaves Lansdown to AJ Bell Youinvest a few years ago. The design of the website is not quite as slick, but apart from that I've not noticed any difference in the quality of service. I've had to contact them by telephone a few times and have always had quick and responsive answers to my queries. Moving there will immediately take the custody fee from 0.45% per annum to 0.25% per annum. That would be a saving of roughly £200 a year based on a £100,000 combined ISA and SIPP portfolio.

You can transfer across your existing holdings 'in specie' (which means they transfer the actual holdings without selling them to cash and re-buying in your new account). This takes a bit longer than a cash transfer. HL will charge you £25 per holding for their administration costs, but AJ Bell have a transfer offer where they will refund these fees up to £500: https://www.youinvest.co.uk/landingpage/transferinoffer

I'm sure you will get plenty of other thoughts about the portfolio itself. In general I think you could probably sell down some of your individual stocks and smaller fund holdings (before transferring, maybe, to reduce the transfer costs) and then reinvest in a 'one and done' global tracker such as an MSCI World ETF or the Vanguard Global All Cap fund to make it simpler and reduce costs.

In any case, I hope the recommendation for AJ Bell is helpful.
Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

danielbird193 wrote: Mon Aug 19, 2019 6:04 am I switched from Hargreaves Lansdown to AJ Bell Youinvest a few years ago. The design of the website is not quite as slick, but apart from that I've not noticed any difference in the quality of service. I've had to contact them by telephone a few times and have always had quick and responsive answers to my queries. Moving there will immediately take the custody fee from 0.45% per annum to 0.25% per annum. That would be a saving of roughly £200 a year based on a £100,000 combined ISA and SIPP portfolio.

You can transfer across your existing holdings 'in specie' (which means they transfer the actual holdings without selling them to cash and re-buying in your new account). This takes a bit longer than a cash transfer. HL will charge you £25 per holding for their administration costs, but AJ Bell have a transfer offer where they will refund these fees up to £500: https://www.youinvest.co.uk/landingpage/transferinoffer

I'm sure you will get plenty of other thoughts about the portfolio itself. In general I think you could probably sell down some of your individual stocks and smaller fund holdings (before transferring, maybe, to reduce the transfer costs) and then reinvest in a 'one and done' global tracker such as an MSCI World ETF or the Vanguard Global All Cap fund to make it simpler and reduce costs.

In any case, I hope the recommendation for AJ Bell is helpful.
Thanks a lot. As Vanguard doesn't offer a SIPP (and I'd rather have everything in one place), I'll consider AJ Bell as well.
monchan
Posts: 2
Joined: Mon Aug 19, 2019 2:51 am

Re: Portfolio assessment [UK]

Post by monchan »

iWeb is clunky but unbeatable for costs. £25 to create account, £5 per trade thereafter and no admin/holding fees. However, to maximise such benefits you might want to consider streamling the number of funds you hold and therefore trade.
One question: are you looking for a passive/hands free approach or more hands on? The fact you have holdings in individual companies suggest the latter, but are you wishing to keep this approach?
If you wish to go down the passive route, then would suggest simplifying down to global equities & global bonds (theoretically you could put everything into just two funds).
For a nice perspective on the passive approach check Lars Kroijer
http://kroijer.com/
TedSwippet
Posts: 3160
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Portfolio assessment [UK]

Post by TedSwippet »

becky47 wrote: Mon Aug 19, 2019 5:12 am Also what's the consensus here in terms of cheapest platform for someone who mainly invests for long-term growth, and mainly on S&P500 or Global ETFs?
This is a simple question, but without a simple answer. Which UK platform is cheapest for you depends on what things you hold your money in (funds, ETFs, stocks, etc), how much you hold in each, and and how often you trade each of them. This web site should help sort the details out for you:

http://www.comparefundplatforms.com/

You will probably find that you get different answers for your ISA and your SIPP. My guess is that iWeb would be the cheapest for your ISA. It's very hard to beat £0/0% as an annual platform charge.

For your SIPP, because it currently has a relatively low balance a low-end percentage based platform such as Youinvest might be the best bet (assuming Vanguard direct isn't an option because you want to hold non-Vanguard things). Once the SIPP's balance rises to above £100k or so a flat fee platform such as Interactive Investor might start to make sense, but again this very much depends on what types of investments you hold and how often you anticipate trading.
Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

monchan wrote: Mon Aug 19, 2019 6:14 am iWeb is clunky but unbeatable for costs. £25 to create account, £5 per trade thereafter and no admin/holding fees. However, to maximise such benefits you might want to consider streamling the number of funds you hold and therefore trade.
One question: are you looking for a passive/hands free approach or more hands on? The fact you have holdings in individual companies suggest the latter, but are you wishing to keep this approach?
If you wish to go down the passive route, then would suggest simplifying down to global equities & global bonds (theoretically you could put everything into just two funds).
For a nice perspective on the passive approach check Lars Kroijer
http://kroijer.com/
Thanks for the suggestions.
I don't hold much individual shares, and the move was just to see how the whole shares game works. Plus, I went on BATS for the dividend payout. Bottom line, no, I am thinking more passive / hands off, so going forward I am thinking of concentrating 80-90% on S&P500, or a similar passive tracker on low cost.
Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

TedSwippet wrote: Mon Aug 19, 2019 6:28 am
becky47 wrote: Mon Aug 19, 2019 5:12 am Also what's the consensus here in terms of cheapest platform for someone who mainly invests for long-term growth, and mainly on S&P500 or Global ETFs?
This is a simple question, but without a simple answer. Which UK platform is cheapest for you depends on what things you hold your money in (funds, ETFs, stocks, etc), how much you hold in each, and and how often you trade each of them. This web site should help sort the details out for you:

http://www.comparefundplatforms.com/

You will probably find that you get different answers for your ISA and your SIPP. My guess is that iWeb would be the cheapest for your ISA. It's very hard to beat £0/0% as an annual platform charge.

For your SIPP, because it currently has a relatively low balance a low-end percentage based platform such as Youinvest might be the best bet (assuming Vanguard direct isn't an option because you want to hold non-Vanguard things). Once the SIPP's balance rises to above £100k or so a flat fee platform such as Interactive Investor might start to make sense, but again this very much depends on what types of investments you hold and how often you anticipate trading.
Again, I am thinking more of a hands off approach going forward.
Could I transfer my existing shares to iweb?
TedSwippet
Posts: 3160
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Portfolio assessment [UK]

Post by TedSwippet »

becky47 wrote: Mon Aug 19, 2019 7:27 amAgain, I am thinking more of a hands off approach going forward.
Could I transfer my existing shares to iweb?
You can. iWeb accounts can hold direct shares as well as funds, OEICs, unit trusts, investment trusts, and so on.

Be aware that Hargreaves Lansdown charge handsomely for moving existing holdings intact, £25 per line held, so the costs for doing this might put you off if you are not planning to consolidate a lot of this stuff into just a few tracker funds.
Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

TedSwippet wrote: Mon Aug 19, 2019 7:49 am
becky47 wrote: Mon Aug 19, 2019 7:27 amAgain, I am thinking more of a hands off approach going forward.
Could I transfer my existing shares to iweb?
You can. iWeb accounts can hold direct shares as well as funds, OEICs, unit trusts, investment trusts, and so on.

Be aware that Hargreaves Lansdown charge handsomely for moving existing holdings intact, £25 per line held, so the costs for doing this might put you off if you are not planning to consolidate a lot of this stuff into just a few tracker funds.
So you suggest that I consolidate first, then move the across?
TedSwippet
Posts: 3160
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Location: UK

Re: Portfolio assessment [UK]

Post by TedSwippet »

becky47 wrote: Mon Aug 19, 2019 8:56 amSo you suggest that I consolidate first, then move the across?
It depends. HL charges £11.95 for share dealing (discounts if you trade more than 10 times in a month), but nothing for funds dealing. iWeb charges £5 for both share and funds dealing.

Which of these works out cheapest in combination with HL's potentially chunky transfer-out charge depends on the precise detail of what you plan to change in your portfolio.
Valuethinker
Posts: 41129
Joined: Fri May 11, 2007 11:07 am

Re: Portfolio assessment [UK]

Post by Valuethinker »

becky47 wrote: Sun Aug 18, 2019 12:34 pm Hi,

Please help me assess my portfolio (UK). Info below:

Emergency funds: 34k in a savings ISA on 1.5%pa

Debt: No debt, usually 1.5-2k in expenses per month,always paid in full.

Tax Filing Status: Married

Tax Rate: 20% on property income, 7.5% on dividends up to 50k for this year (running own company)

State of Residence: UK

Age: 36

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 100% of stocks

S&S ISA c.75k
SIPP c.21k
Cash + Emergency fund c.100k
2 properties rent out, income c.30k pa
properties market value c.500k

Contributions

New annual Contributions
£200 per month in SIPP (+return 25% from government)
£1666 per month in S&S ISA (non-taxed)

Available funds

Funds available in S&S ISA(k)

6.44% ASI Asia Pacific Equity Class I - Accumulation (GBP)
0.27% BP Plc Ordinary US$0.25 *1
3.3% British American Tobacco plc Ordinary 25p *1
0.55% Coca Cola Company (The) Com Stk USD0.25 (CDI) *1 *R
0.23% Facebook Inc Com USD0.000006 *1 *R
0.81% Funding Circle PLC ORD GBP0.001 *1
11.86% Fundsmith Equity Class I - Accumulation (GBP)
10.42% JPMorgan Emerging Markets Class B - Accumulation (GBP)
7.37% Jupiter European Class I - Accumulation (GBP)
12.08% Legal & General International Index Trust Class C - Accumulation (GBP)
7.97% LF Lindsell Train UK Equity Class D - Accumulation (GBP)
1.96% LF Woodford Equity Income Class Z - Accumulation (GBP)
5.55% Merian UK Smaller Companies Class R - Accumulation (GBP)
0.69% Microsoft Corporation Comm Stk US$ 0.0000125 (Crest Depository Interest) *1 *R
0.19% Ryanair Holdings Ordinary Shares EUR0.006 *1 *R
0.07% Sirius Minerals plc Ordinary GBP 0.0025 *1
7.54% UBS Global Enhanced Equity Income Class C - Accumulation (GBP) *2
22.71% UBS S&P 500 Index Class C - Accumulation (GBP) *2

Funds available in SIPP(k)
15.5% Artemis Strategic Bond Class MI - Accumulation (GBP)
17.88% BNY Mellon Global Income Class U - Accumulation (GBP)
15.11% JPMorgan Emerging Markets Class B - Accumulation (GBP)
1.59% LF Woodford Equity Income Class Z - Accumulation (GBP)
16.37% Lindsell Train Global Equity Class D - Income (GBP)
2.52% Sirius Minerals plc Ordinary GBP 0.0025 *1
31.03% UBS S&P 500 Index Class C - Accumulation (GBP) *2

Questions:
1. Thanks for taking the time to review the above. As I'm UK based, and the instructions were targeted on US residents, I'm not sure if someone can still assess.

2. Thinking of purchaseing a house to live as renting at the moment. That's the explanation of the extra cash.

3. Am I on a good road investment-wise? Any improvements that you can see of? The plethora of funds comes from me playing around with investing, so I decided to consolidate some, and leave some as they were. I am now almost solely putting my future investments on S&P500 tracker and maybe Lindsell Train.
I would move 100% of your ISA across to Vanguard UK. No they are not the lowest cost one out there, but they are transparent.

Their 0.1% p.a. charge in addition to the funds you hold is capped at £350 a year. So my proposal might cost you £75 pa additional. However it would be transparent (and simple).

I would put that 100% into their world index tracker fund (I'd have to look up the ticker). It offers the great virtue that you will not then be distracted by "high performing" funds - I can't tell you how many people put all their money into tech funds in 1999 and then lost most of it in 2000-03. It's a Boglehead principle that you buy the market and let market efficiency do the hard work of picking future winners & losers.

The reason for a Global Tracker vs. an S&P 500 tracker is the US is about 55-60% of world markets. Why skip the other 45%? What do we know about which is likely to do better that the market as a whole doesn't know. Why would we favour the USA?

That leaves your SIPP. I don't know who offers the cheapest SIPP these days. The funds available to you are awful - you need a better provider.

I would tend to go for pretty much the same thing for your SIPP.

I do not believe you should have 100% equities. I think you should be 20% bonds. A UK government gilt fund would do it or an international government bond fund (sterling hedged). The reason being bear markets often coincide with difficulties in the economy. Thus your property income, your business income, and your portfolio could all go down together.

Very few people really have the stomach for 100% equities. We are 10 years into a bull market, people are having trouble remembering what the last one felt like. Believe me it was like the sickening lurch when you reach the top of a roller coaster, but you don't know if there is really a safety system. Or when a plane hits a bad air pocket and drops hundreds of feet instantly.

If you do have bonds it is better to have them in your SIPP and equities in your ISA.
TedSwippet
Posts: 3160
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Location: UK

Re: Portfolio assessment [UK]

Post by TedSwippet »

Valuethinker wrote: Mon Aug 19, 2019 11:19 amThat leaves your SIPP. I don't know who offers the cheapest SIPP these days. The funds available to you are awful - you need a better provider.
Reading between the lines, it seems that the topic author put the funds they actually hold under 'Funds available in ...'. At least, that's the way I read this, based on the fact that each is prefixed with a percentage which totals 100% when read top-to-bottom. (This site's new posting template does not work well for non-US investors.)

The current provider seems to be Hargreaves Lansdown, based on upthread comments.
Valuethinker wrote: Mon Aug 19, 2019 11:19 amTheir {Vanguard's} 0.1% p.a. charge in addition to the funds you hold is capped at £350 a year.
Actually, Vanguard's platform charge is 0.15%, capped at £375/year. And so far, no direct SIPP offering (it's perpetually 'coming soon', apparently).
Topic Author
becky47
Posts: 11
Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

TedSwippet wrote: Mon Aug 19, 2019 11:30 am
Valuethinker wrote: Mon Aug 19, 2019 11:19 amThat leaves your SIPP. I don't know who offers the cheapest SIPP these days. The funds available to you are awful - you need a better provider.
Reading between the lines, it seems that the topic author put the funds they actually hold under 'Funds available in ...'. At least, that's the way I read this, based on the fact that each is prefixed with a percentage which totals 100% when read top-to-bottom. (This site's new posting template does not work well for non-US investors.)

The current provider seems to be Hargreaves Lansdown, based on upthread comments.
Valuethinker wrote: Mon Aug 19, 2019 11:19 amTheir {Vanguard's} 0.1% p.a. charge in addition to the funds you hold is capped at £350 a year.
Actually, Vanguard's platform charge is 0.15%, capped at £375/year. And so far, no direct SIPP offering (it's perpetually 'coming soon', apparently).
Your assumptions are correct in both cases.
Valuethinker
Posts: 41129
Joined: Fri May 11, 2007 11:07 am

Re: Portfolio assessment [UK]

Post by Valuethinker »

TedSwippet wrote: Mon Aug 19, 2019 11:30 am
Valuethinker wrote: Mon Aug 19, 2019 11:19 amThat leaves your SIPP. I don't know who offers the cheapest SIPP these days. The funds available to you are awful - you need a better provider.
Reading between the lines, it seems that the topic author put the funds they actually hold under 'Funds available in ...'. At least, that's the way I read this, based on the fact that each is prefixed with a percentage which totals 100% when read top-to-bottom. (This site's new posting template does not work well for non-US investors.)

The current provider seems to be Hargreaves Lansdown, based on upthread comments.
Valuethinker wrote: Mon Aug 19, 2019 11:19 amTheir {Vanguard's} 0.1% p.a. charge in addition to the funds you hold is capped at £350 a year.
Actually, Vanguard's platform charge is 0.15%, capped at £375/year. And so far, no direct SIPP offering (it's perpetually 'coming soon', apparently).
Shows you how much attention I pay ;-).

I think reducing costs can become obsessive - not seeing the forest for the trees.

The mess than fund charging is now in the UK, with each platform seeming to have different rules, makes me scream for transparency. Reverse depolarisation has been nothing but a customer nightmare.

Vanguard is transparent. I know where I stand -- the total charges I am paying. Unfortunately they do not accept non-VG holdings, as I have share holdings in a taxable form that cannot be sold without triggering big capital gains.

Also the ishares world value ETF takes bets on countries, whereas the Vanguard value fund seems to stick pretty close to country weightings in the index- thus is overweight USA.

There is an ishares Emerging Market Value ETF (EMVL) but I cannot make the Barclays platform produce it to buy.
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becky47
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Joined: Sun Aug 18, 2019 12:04 pm

Re: Portfolio assessment [UK]

Post by becky47 »

What's weird is that, despite costs being a clear differentiator, there are some people who are Vanguard fans (proponents), some Fidelity, some HL, some iWeb, some Degiro etc...
Valuethinker
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Joined: Fri May 11, 2007 11:07 am

Re: Portfolio assessment [UK]

Post by Valuethinker »

becky47 wrote: Tue Aug 20, 2019 5:11 am What's weird is that, despite costs being a clear differentiator, there are some people who are Vanguard fans (proponents), some Fidelity, some HL, some iWeb, some Degiro etc...
Because each platform has a profusion of costs, different share classes etc.

So it depends what your portfolio looks like.

I was impressed with how easy it was to switch my ISAs to Vanguard. Painless procedure.

Having done so, I try not to check my portfolio valuation - ideally I would only do so once a year (at ISA contribution time). And rebalance at that time too.

Every asset allocation change I have ever made has been the wrong one. PS I am really betting against sterling right now, on account of hard Brexit - holding global bond & stock funds (currency unhedged) ;-).
TedSwippet
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Location: UK

Re: Portfolio assessment [UK]

Post by TedSwippet »

Valuethinker wrote: Tue Aug 20, 2019 4:49 amI think reducing costs can become obsessive - not seeing the forest for the trees.
I suppose it can, though it depends on circumstances. For example, for my portfolio I pay iWeb £0/year, but £5/trade. I trade perhaps once or twice a year, usually new ISA contributions and perhaps a bit of rebalancing, so £10/year.

Compare to £375/year at Vanguard direct (and that's not even taking into account that I have a decade's worth of investments held in excellent HSBC index tracker funds that I cannot hold at Vanguard and which would cost me an arm and a leg in capital gains tax to sell). My £365 saving paid for a nice week's break in the Med last year. This year it covered the first week of a three-week cruise.

And it's not like iWeb is a nobody here. They are basically a rebadged Halifax Sharedealing, so have a decently sized bank behind them. I find their platform easy enough to use. Locating some funds the first time can be a bit of a fiddle, but after that the 'Buy' and 'Sell' buttons beside things you already hold make things very easy.

It lacks some of the frills you might see elsewhere, for example a portfolio 'X-ray', but those are available independently if you need them. Personally I don't, since I hold only trackers, one UK, one Europe, one US, one Japan, and one Pacific ex-Japan. An 'X-ray' won't show any overlaps there!
Valuethinker wrote: Tue Aug 20, 2019 4:49 amThe mess than fund charging is now in the UK, with each platform seeming to have different rules, makes me scream for transparency. Reverse depolarisation has been nothing but a customer nightmare.
I see (over-)transparency as being a component of the problem here, rather than the solution. A simple charge for everything seems appealing, but that would leave buy-and-hold investors subsidising hyperactive traders. And I am ideologically opposed to percentage-based platform fees. In practice I think the likes of Halifax (including iWeb) and Interactive Investor have it about right; flat-fee for the platform and then a bit extra for trading.

The percentage-based platforms use to subsist on a diet of backhanders from OEIC providers. The RDR banned that a few years ago. In response, these platforms decided to apply their own percentage-based charge on fund holdings only, but leave share, ETF and IT investors unmolested. To me, this leaves a nasty taste. Fund and OEIC holdings cannot possible be tens or hundreds of times more expensive to platform than shares, ETFs and ITs.
Valuethinker wrote: Tue Aug 20, 2019 4:49 amVanguard is transparent. I know where I stand -- the total charges I am paying. Unfortunately they do not accept non-VG holdings, as I have share holdings in a taxable form that cannot be sold without triggering big capital gains.
Similar problem here, just with other provider's funds. I recall some chatter when it opened of Vanguard's platform considering accepting some other fund company's OEICs, but nothing seems to have come of it. I would not be thrilled to pay Vanguard's £375 given that I currently pay so much less than this, but at least it is just 0.15% and capped at a decent level.

Compare to Youinvest and HL where the charges are 0.25% and 0.45% respectively and the cap (if any) is ludicrously high. These two would cost me £thousands/year when compared to iWeb. Converting my current holdings to ETFs to dodge these fund charges is infeasible for me due to built-in capital gains.
Valuethinker wrote: Tue Aug 20, 2019 4:49 amAlso the ishares world value ETF takes bets on countries, whereas the Vanguard value fund seems to stick pretty close to country weightings in the index- thus is overweight USA.
This is the area where I run into my own 'forest for the trees' issues. As long as I hold funds that track established global or regional indexes that are well diversified, I don't worry too much about the makeup of the indexes themselves. I'm very much a 'this is going to be good enough' type of person in this respect. It might or not be optimal, but I don't necessarily require that. What I need is for it to be sufficient.
minimalistmarc
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Joined: Fri Jul 24, 2015 4:38 pm

Re: Portfolio assessment [UK]

Post by minimalistmarc »

If you avoid funds and don’t trade HL is very cheap for the quality and I like that you can link family members accounts.
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