S&S ISA questions from a newbie

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I have around £5.5k of savings and am looking to put £100-£200 pcm into the stocks and shares ISA I set up with Hargreaves and Lansdown. This is a major change for me, as I’ve spent most of adulthood on a debt merry-go-round.

There is just over £1000 in my stocks and shares ISA and I have put money into 4 funds (FTSE100, FTSE 250, cyber security ETF, individual company share). The fees are all well below 0.5% for each fund. I’ll be keeping the £4K for emergencies in a savings account, but won’t be adding to it- I’d rather invest instead.

My question is, do I really need to pay £11.95 every time I want to add £100-£200 into the FTSE 250 pot? This seems very expensive and is surely going to eradicate any profit I make.

Or do I just leave my money to accumulate to £1000 and the purchase the fund shares?

I don’t need the money any time soon, but am keen to learn. I’ve read lots/ listened to lots of podcasts etc, but can’t seem to find the answer to my question.

Thanks

By ‘I don’t need the money’ I mean... I can afford to lose it. Of course I’d rather not lose any, but my income is fairly decent and job secure, including sick pay/ cover for long term health issues. I’m looking to invest for 20 years

If you are paying a fixed trading commission of £11.95 / purchase, then you are right to want to make a smaller number of larger purchases. Accumulating to £1000 before each purchase sounds sensible to me, unless you can find a way to invest small period amounts that does not have a fixed per-trade commission.

Also I wonder why you chose FTSE250 and FTSE100 instead of a global index such as MSCI ACWI or MSCI World? The UK market has a very peculiar sector mix: FTSE100 is very heavy on banks and energy companies, and fairly light on technology. FTSE250 excludes all of the largest companies and is heavy on financials as well as more cyclical industries (industrials and consumer discretionary).

Thanks @YankeeDad
as I said I’m just starting out so don’t really know what I’m doing.. I chose UK because it felt safer somehow?

But the way you’ve explained it, that was illogical really as not spreading my bets!

Look at Vanguard, the fees and expenses are much lower. I agree with the S&P 500 being a better index to track.

The customer service at Vanguard is excellent. It's also owned by its investors and run for their benefit.

Thank you everyone- looking at Vanguard now, it seems it will better meet my needs and budget. I went with HL because it’s well known and safe.

I already had the S&P 500 on my list to invest in next. So it’s good to know it’s recognised here (have seen referenced on other posts too).

If I want to open a Vanguard S&S ISA what are my options? Keep HL but stop investing and switch to investing to Vanguard? Wait until new tax year? Also option to put in husbands name as he doesn’t have an ISA. It’s joint family money so doesn’t matter whose name it’s in.

I was with HL for a couple of years before I settled on an investing strategy. HL has access to a lot of funds and individual shares, have a good app, but this comes at a cost. 0.45% platform fee and then additional fees on some types of trades.

I transferred to Vanguard Investor... it takes time to move over, so to keep in the market as long as possible move as much as you can into a Vanguard fund on the HL platform which is also available on the Vanguard platform - then that fund can be moved between the two rather than be sold to cash.

You may decide to keep things simple... Vanguard provide global funds like the FTSE Global All Cap and they provide managed funds of funds... like Lifestrategy and Targetdate Retirement.

You may want to look at having a core and satellite approach - so most of your money in one fund, then having some else a bit more speculative for a small portion of your money.

Avoid tinkering... set it up and forget. Check in occasionally but don't tinker. Platforms make money when you buy and sell things. Keep your costs low, trade once a month on automatic, so you just keep buying more of what you have. Review annually.

Stick to the ISA rules. Do not move things yourself, the new ISA provider does the move from the old provider (called a Transfer In).

If you open an account at Vanguard they can transfer your money from the HL account into your new Vanguard account. I wouldn't bother keeping the HL account. There's no reason to wait until a new tax year, and by all means, add your husband to the account. Give them a call on Monday, they will answer all of your questions.

Also, take a look at their Life Strategy funds. You select the risk level you are comfortable with and they do the rest. Perfect for a novice investor.

www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products

Vanguard is a huge, highly regarded American investments firm that was started by a bloke named Jack Bogel who believed that investors should come first and wanted to open investing to people of all classes and means:

about.vanguard.com/who-we-are/a-remarkable-history/

I've been with them for 30 years. It's a brilliant company.

ISA is individual. So you cannot transfer from a ISA in your name to an ISA in your husbands name.

You can both have an ISA assuming you are UK resident, not dual nationals. You could stay with HL if you wanted and have your husband open an account with Vanguard.

You can only pay in to one ISA each tax year, except if an ISA is transferred. So you can open an ISA with Vanguard and transfer in from HL as part of that account opening.

Wow thank you so much, that’s really clear and helpful! I’m much clearer on my options now.

I really like Vanguard for their really low fees and user-friendly platform; the fees you are paying do seem high to me. Personally I use Vanguard's Lifestrategy 80 as it's something we were able to set up and then forget, and the fees are .22% with no charges for transfers. Lifestrategy is great for beginners as it's a one stop shop to get a really diversified portfolio that they will rebalance for you; all you have to do is pick your risk level, set up the direct debit or the one-off transfer, and off you go.

Bogle (sorry for the earlier misspelling) was quite a character. I heard him speak at a conference many years ago. He was notoriously cheap, as part of his focus on lowering investing costs.

en.wikipedia.org/wiki/John_C._Bogle

The story goes that he went to once Vanguard's annual meeting, and rather than having a limo pick him up at the airport, he rented a tiny Ford Escort and drove himself. When asked why, he replied "It was the cheapest car they had", rather missing the point that most investment company CEOs would not have bothered themselves to save a few dollars.

He even has a fan club.

www.bogleheads.org

@MissConductUS he sounds like a charax- the mind boggles

*character

I didn't mean to give the impression that Bogle was some kind of nutter. By all reports, he was a lovely man, kind and warm and very good to his employees. He just had a single-minded focus on saving his investors money. Vanguard is still run very efficiently.

I invest for my grandchildren. And in my money purchase pension

All is 100% MSCI ACWI or equivalent

You could have a fund with Fidelity, or an ETF such as Vanguard or iShares or fund like Vanguard All Cap Global with A J Bell - I use both. I also use Interactive Investor

Look at their fees and choose what is best for you. Fidelity has no transaction fee as far as I am aware

I have various Vanguard lifestrategy s&s isa's and can't rate them highly enough. The growth over the last year has really made them worth while, and their fees are low.

I'm in a similar position. I do know a little bit about investing but have never had the funds until now.

I'm with HL. I do like vanguard but they don't have the choice of funds that HL do.

I'm interested in people's thoughts about whether it's worth investing in the UK? I keep reading about how important it is to diversify. So I have funds based in America and Asia and a global technology fund.

I also have one in smaller UK companies.

I'm hesitating though about whether to invest any more in the UK? I can't see the FTSE 100 going anywhere in the medium or even long term (10 years) so won't be investing in that. Am not even sure about FTSE 250.

I'm also not sure about Europe. The cheapest funds are index trackers but I just can't see either the UK or European indexes rising much in the next 5 years at least and I feel there are much better returns to be had elsewhere.

But then I don't want to be too far weighted to the US either.

I'd appreciate any thoughts on this, am I being overly pessimistic about the UK/Europe?

Amboseli

If you re-read your post it sounds like you are not too keen on investing anywhere! Which is how many of us feel

That’s why after decades of chopping and changing I settled on Global All Cap index funds

I do have other ISAs where I put money into Investment Trusts as a bit of a hobby

It is also strange that people often don’t focus on their money purchase pension funds where most of their investing is done

At least with index funds the randomness is planned unlike I would suggest most people’s ragbag portfolios