How to actually buy into a fund

[TeenagersAngst]

Apologies if this is the type of question that comes up repeatedly but am new to this topic.

I've done quite a bit of research recently and want to invest into global multi asset funds (having listened to the advice of Pete, Meaningful Money).

So how do I physically do it? I already have a S&S ISA with Fidelity so am assuming I can just do it on their platform inside a pension or an ISA?

Yes, you should be able to do that through your ISA. Do you have an online login for your Fidelity account? They have guides to investing that you might find useful. You can look up any global multi-asset fund (Vanguard, Legal & General, etc) and check their fees and structure.

Presumably you did something like this already when you opened the stocks & shares ISA? What did you invest in?

Thanks @Squiblet

My ISA is invested into shares, I have it split between four FTSE 100 companies. I haven't touched it since I bought them.

I've never considered funds before so this is all new to me.

I found the Vanguard Life Strategy fund listed on the Fidelity platform but it gave me a unit price which confused me. Is that how you buy into funds?

And yes. I do have a login for Fidelity

Ok, so you're nearly there! The Vanguard life strategy sounds like a good choice and it's less risky than having all your money in just four companies.

Note that there are five Life strategy funds with different levels of equity investment. A higher percentage of equities equals higher risk. If you're young and plan to keep the fund for 20 years, that's no big deal, but if you're considering retirement soonish, you want a lower-equity fund.

When you click on "buy", you'll be given a choice to buy either X number of units, or £X worth of units. So you can just choose how much you want to invest.

If you have to get out of your FTSE100 shares first, you may have to click "transfer" in order to transfer that money to the Vanguard fund. If you click "sell" it may take your money out of the ISA wrapper - although I'm not sure about that.

Thanks @Squiblet I appreciate you taking the time to explain.

If I want to save on a monthly basis, I just buy units each month, is that how it works?

I don't know how the Fidelity platform works but on the platform I use I have a set monthly amount which buys that amount worth of units.

With an OEIC (Open Ended Investment Company) fund such as Vanguard Lifestrategy you can buy partial units, so if a unit price is £263.88 and your monthly amount is £50, then you would buy about 18.94% of a unit.

You're welcome! I've never done monthly saving so not sure about that. Just be careful fidelity don't sting you by charging you a transaction fee each month, as well as the service fee or whatever it's called. They can be so sneaky that way

It's worth thinking about the level of fees, which sound small but do eat into your investment quite considerably over time if you're not careful. I don't think Fidelity have a fee for buying & selling funds (although they do for shares), but they do have an annual platform charge of 0.35% and then the individual funds have management charges on top (low for index trackers, higher for actively managed funds).

If you're just going to invest into a small range of funds (or shares) for the long term, it's worth considering one of the free or low cost platforms such as Trading 212 or Freetrade. I like Trading 212 a lot, very simple to use - more info and a referral link on my other thread here. The main thing though is that there is no annual platform charge and no buying/selling charges for either funds or shares.

There is the option to open a new ISA account providing that you haven't paid into your Fidelity one already this tax year. Alternatively could consider transferring your existing ISA, but a bit more awkward. Could make sense in the longer term though just to minimise ongoing fees.

Thanks all, really appreciate everyone's advice

A whole world tracker like Fidelity Index World is a very low cost 0.12%
HSBC FTSE All World is 0.13%