Fire and forget ISA fund?

[Inspectorclueso]

Just sorting this years ISA. For ease I've just swapped some cash out of the Hargreaves Lansdown cash platform into an ISA with HL, ready to then pick a fund.

Had browse on the HL site at funds, but as always, there's a load to choose from.

My basic criteria is:

- I can forget it for 5+ years
- Medium to low risk
- Accumulate, not income
- Charges - I was leaning towards Vanguard life strategy, but for some reason the HL platform shows higher fees, not sure if this really matters over 5 or so years.
- I don't want to be trading in this ISA

Any recommendations ?

PS - fully recognise things can go down as well as up and all that stuff.

[Cheese on Toast with Worcestershire Sauce]

S&p500

[bitchstewie]

Medium to low risk and the first suggestion is the S&P 500

I'd say by most definitions "medium to low risk" is probably something around 60 percent equities arguably a little less.

So in the LifeStrategy range you might want to look at LifeStrategy 60 possibly LifeStrategy 40.

The fee you'll pay Vanguard for the LifeStrategy fund would be 0.22% and that's the same whoever you hold it with.

The fee you'll pay HL as the platform you invest with will vary depending how much you're talking about but it will probably be 0.45%.

That's on top of the fund fee to Vanguard.

[leef44]

As bhstewie says, if you are looking for lower risk then 60/40 Life Strategy is probably better. However with 5+ years fund and forget I would look at something like VWRP but that is higher risk because it is 100% equity with better opportunity for higher returns.

HL charges 0.45% for their platform but in an ISA if you invest in ETF only then it is capped at £45 p.a. VWRP (Vanguard FTSE all world ETF) would fit as an etf.

Otherwise, if you want more flexibility to choose indices or Life Strategy then using Vanguard as a platform may give you lower costs at 0.15% platform fees.

[Inspectorclueso]

thanks all. After the comments on the fees, I sense that I may as well just set up the ISA direct with Vanguard, don't see why I'd pay the 0.45 % on top.

[C69]

Inspectorclueso said:

My basic criteria is:
- Medium to low risk

This Standard Life questionnaire might be helpful in assessing your attitude to risk: https://www.standardlife.co.uk/investments/tools/i...

This Vanguard (US) questionnaire takes things one step further by trying to determine an equities / bonds mix that you'd be comfortable with: https://investor.vanguard.com/tools-calculators/in...

"Medium to low risk" does not shout 100% equities (as some have suggested). Yes, you're considering a fairly long investment horizon, but you don't want to spend all that time constantly stressed and worrying about your ISA's performance.

Inspectorclueso said:

My basic criteria is:
- Charges - I was leaning towards Vanguard life strategy, but for some reason the HL platform shows higher fees, not sure if this really matters over 5 or so years.

The higher platform fees really do matter, especially over a longer time period.

[bitchstewie]

Inspectorclueso said:

thanks all. After the comments on the fees, I sense that I may as well just set up the ISA direct with Vanguard, don't see why I'd pay the 0.45 % on top.

There is no single "best" platform you'll find it really depends on the amount and your investment pattern.

i.e. if you're "only" investing a couple of grand and topping it up by a few hundred each month you may be talking less than a tenner a year.

If you're putting in a lump sum of £50K you might want to look at a fixed cost platform like IWEB or II but you might find you're paying a fixed monthly fee or a cost to buy and sell funds.

Basically do your homework for your personal situation or post some rough numbers here and you'll probably get some suggestions.

[Inspectorclueso]

Just to clarify a few bits, as this is ISA, I'm putting £20k in, in one go, then forgetting. Fair point on the low / med risk point not meaning 100% equity. I was only indicating this as a rough guide, i.e. not looking to be overly adventurous with these funds, but at the same time, it'll not cost me any sleep i.e. no stress as it does doubtless move up and down ! I'll be going for this or something similar x2 as sorting the allowances for my wife as well.

Thanks again all, always appreciate the advice from those more knowledgeable on this stuff than me....to be honest, time on this doesn't really float my boat, so I just look for a decent dose of convenience, without getting stitched up.

[bitchstewie]

Pragmatically then, Vanguard and done, or maybe IWEB and done.

Nice thing with Vanguard is they only offer their own funds which can reduce the urge to tinker.

LifeStrategy or HSBC Global Strategy are decent multi-asset ranges or if you want 100% equities Vanguard FTSE Global All Cap gets you the whole world.

I think as you say a lot of this depends on your definition of "low or medium risk" but if you said to an IFA (I don't work in finance so please don't trust a word I say) "low or medium risk" they wouldn't steer you towards a 100% equity fund.

[Panamax]

Well, I think you'd need to take a big brave pill to plough everything into S&P500 right now. Uncertainties around the US economy and stock markets combined with a weakening US dollar suggest caution rather than just believing what worked for the last 10 years will automatically work for the next 10.

So what's the solution?

Many prudent investors would be looking at diversification.
Diversification across geography - for instance a global equity fund.
Diversification across asset classes if 100% equity feels too risky - for instance a multi-asset fund.

[SO27]

Inspectorclueso said:

Just sorting this years ISA. For ease I've just swapped some cash out of the Hargreaves Lansdown cash platform into an ISA with HL, ready to then pick a fund.

Had browse on the HL site at funds, but as always, there's a load to choose from.

My basic criteria is:

- I can forget it for 5+ years
- Medium to low risk
- Accumulate, not income
- Charges - I was leaning towards Vanguard life strategy, but for some reason the HL platform shows higher fees, not sure if this really matters over 5 or so years.
- I don't want to be trading in this ISA

Any recommendations ?

PS - fully recognise things can go down as well as up and all that stuff.

From the bold bit in your OP, if you've already put £20k into the HL ISA, you can't take it out and put it into another one. You'll have to stick with HL for this year.

[Inspectorclueso]

SO27 said:

From the bold bit in your OP, if you've already put £20k into the HL ISA, you can't take it out and put it into another one. You'll have to stick with HL for this year.

Ah....yes to be honest that thought did cross my mind, I'll therefore just go with that as a platform. At the end of the day 0.45% on £20k, isn't going to be the thing that makes or breaks it....just like to get the best deal if I can.

Thanks all.

[Hustle_]

If you've got less than £32k in the account, Vanguard are very uncompetitive on fees. Worth avoiding.

[LeoSayer]

Can you be more precise about when you are likely to need to sell the funds?

If your "5+" years actually means 15 years then the answer will be very different to say, 6 years.

[BoRED S2upid]

Cheese on Toast with Worcestershire Sauce said:

S&p500

lol.

[bitchstewie]

Inspectorclueso said:

Ah....yes to be honest that thought did cross my mind, I'll therefore just go with that as a platform. At the end of the day 0.45% on £20k, isn't going to be the thing that makes or breaks it....just like to get the best deal if I can.

Thanks all.

You can transfer it anyway you're not stuck with them if the 0.45% starts to needle you.

[Hustle_]

SO27 said:

From the bold bit in your OP, if you've already put £20k into the HL ISA, you can't take it out and put it into another one. You'll have to stick with HL for this year.

No you can't take it out and put it into another one, unless it happens to be a flexible ISA- but you can transfer it into a different ISA from a different provider.

[Simpo Two]

Hustle_ said:

SO27 said:

From the bold bit in your OP, if you've already put £20k into the HL ISA, you can't take it out and put it into another one. You'll have to stick with HL for this year.

No you can't take it out and put it into another one, unless it happens to be a flexible ISA- but you can transfer it into a different ISA from a different provider.

I read it that he'd transferred £20K cash into his H&L ISA, and is now deciding what to invest it in within that ISA.

[leef44]

As mentioned earlier by another poster, Vanguard is a minimum charge of £48 p.a. for its platform fee (0.15% of £32k)

However Hargreaves L is capped at £45 in an ISA if you only invest in ETFs e.g. VWRP. However if you want to invest in indices e.g. HSBC FTSE All World Index then it works out quite expensive with Hargreaves because it would not be capped so you would pay £90 (0.45% on £20k).

However there are also Invest Engine and Interactive Investor which don't have % charges but I have not researched how their fees work.

I'm with Barclays and another with HSBC as the platform which charges 0.25% then I invest in HSBC FTSE All World at 0.13% fund fee.

[ooid]

ahh If you were looking for higher risk, I was gonna suggest to look at IWMO. (iShares MSCI World Momentum Factor). It's my fire and forget(an amount that I would not mind risking), and outperformed VWRL as far as I'm aware, costs are slightly higher.