Opening an S&S ISA and choosing funds

Kingdom34

Kingdom34

Kingdom34

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6 Apr 2016
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486
Hi All

Looking at sorting out my pension more so now, than ever. I have a private pension with Aviva through work 4% and 4% contribution. 7 different funds and 5 out of the 7 are Risk factor 3 and above (out of 5).
How often would you review these and make changes? (probably the million dollar question).
I have started to look at websites such as Money Observer to compare current funds and Hargreaves and Landsdown to also open a S&S ISA wrapper to complement my work private pension. I have a £2k lump sump to start and will commit £250 pm in this while maintaining £200 in the Aviva work pension.

I have read a few articles, I'm looking at investing in 3/4 funds, the article HL have for funds to watch in 2018 has made me think about investing in the 4 funds they have suggested as a starting point - https://www.hl.co.uk/funds/five-investment-ideas-2018. Split equally.

Any experienced investors out there who feel this is a good starting point?

I want to retire around 55-60 if I can, but I know that's a big ask....
 
Personally I would steer clear of HL. 0.45% ISA cost before the fund cost is added in is fairly expensive. (taking the first fund on their Five Investment Ideas - Jupiter Income fund is then 0.6% on top of 0.45%)

At a basic level you could get the likes of Vanguards ISA which is 0.15%. Using their Lifestyle fund range (0.22%) your total cost is 0.37% including the funds which is lower than HL before you even add the funds in.

Vanguard only offer their funds, unlike HL who offer a large range of funds so I guess it's depending on how much you want access to lots of funds or whether costs are more important at this stage.
 
Currently passive funds are recommended due to they're low fees, like a global tracker or a market tracker. You need to have a good read before choosing and have a plan, just try stick to your plan and don't micro manage it.
 
I went with Cavendish Online and a mixture of Vanguard Life Strategy funds.

It means my total fees are 0.47% (so 0.1% more than if I’d gone direct with Vanguard) but it gives me the flexibility to switch to non-Vanguard funds in the future if required and it’s still cheaper than HL.
 
booyaka said:
Personally I would steer clear of HL. 0.45% ISA cost before the fund cost is added in is fairly expensive. (taking the first fund on their Five Investment Ideas - Jupiter Income fund is then 0.6% on top of 0.45%)

At a basic level you could get the likes of Vanguards ISA which is 0.15%. Using their Lifestyle fund range (0.22%) your total cost is 0.37% including the funds which is lower than HL before you even add the funds in.

Vanguard only offer their funds, unlike HL who offer a large range of funds so I guess it's depending on how much you want access to lots of funds or whether costs are more important at this stage.
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HL a work colleague use, so Ive been looking at their website, but I did see suggestions of Vanguard on here a few times. I will take a look also. Thank you. As fees will like you say take a portion of any interest.
 
kkelly said:
Currently passive funds are recommended due to they're low fees, like a global tracker or a market tracker. You need to have a good read before choosing and have a plan, just try stick to your plan and don't micro manage it.
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Thank you, this is my problem really, I have no plan....I did complete an online portfolio questionnaire which I can out at a risk level of 5 out of 10, so I'm not a risk taker as much as I thought I was :-).

I do however think I should be investing in emerging markets in Asia, Pharma, UK companies, gut instinct says the UK has to rise up a bit. Steering clear of the US and N.Korea. That's me keeping it simple.
 
Irish_Tom said:
I went with Cavendish Online and a mixture of Vanguard Life Strategy funds.

It means my total fees are 0.47% (so 0.1% more than if I’d gone direct with Vanguard) but it gives me the flexibility to switch to non-Vanguard funds in the future if required and it’s still cheaper than HL.
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This is probably a good mix, I wouldn't want to be restricted to just one set of funds like Vanguard.
 
I originally went with Cavendish and chose some funds, they did alright but had quite high fees. I ended up switching all of mine over to Vanguard, saved loads on the fees and they are performing just as well.

In your situation, I'd just lump it all in Vanguard at a risk level you deem acceptable and forget about it.
 
Street said:
I originally went with Cavendish and chose some funds, they did alright but had quite high fees. I ended up switching all of mine over to Vanguard, saved loads on the fees and they are performing just as well.

In your situation, I'd just lump it all in Vanguard at a risk level you deem acceptable and forget about it.
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I do see a lot of people specifying Vanguard. Would it be a case that I could open a managed fund with them and then add in some funds at my own discretion from time to time? Ie if I ploughed in a bonus £1k every now and again into something run by for instance Terry Smith and the FundSmith Strategy?
 
Kingdom34 said:
I do see a lot of people specifying Vanguard. Would it be a case that I could open a managed fund with them and then add in some funds at my own discretion from time to time? Ie if I ploughed in a bonus £1k every now and again into something run by for instance Terry Smith and the FundSmith Strategy?
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Vanguard ISA is only their own funds. If you wish to use a "fund supermarket" - Fidelity, HL, Cavendish etc all offer that options of most funds on the market etc. You can usually chuck £1k in at a time as and when you want.
 
booyaka said:
Vanguard ISA is only their own funds. If you wish to use a "fund supermarket" - Fidelity, HL, Cavendish etc all offer that options of most funds on the market etc. You can usually chuck £1k in at a time as and when you want.
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Thank you, I'm looking at Vangaurd at the moment, fees are pretty low, I think il go with them and then once I become more informed, I may look to move across and manage my own funds.
 
Kingdom34 said:
Thank you, I'm looking at Vangaurd at the moment, fees are pretty low, I think il go with them and then once I become more informed, I may look to move across and manage my own funds.
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You can always open an account with another provider and buy Vanguard funds - you don’t need a Vanguard S&S ISA to hold Vanguard funds.
 
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