charges-unit trust tracker--ftse-all-share
legal & general
uk index trust--0.55%
any better?
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134liesarenocomfort postedHi Compound200,
You need to look at Total Expense Ratios (TER) of different funds to compare index trackers. The Fidelity one you asked about before is cheaper than the L + G.
There are absolutely loads of articles on the Motley fool site about trackers (it's one of their favourite topics!) - and you might like to start with this one, which suggest the "cut-off" for cost should be a TER of 0.5% which doesn't seem unreasonable, which would rule out the L+G.
If you key in "tracker fund" on the search on the Fool site you'll find plenty of other sensible articles.
Received wisdom seems to be go for the all-share rather than FTSE 100 (more diversity). The HSBC one gets plenty of votes (it's the one I'd go for).
As well as cost there are other issues like "tracking error" which you may want to consider.
Tracker funds can go down of course. FTSE at 3,500 in 2015? Possible. Iran will have the bomb by then...
Posted on 12 February 2010 |
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7compound200 posted
big thx everyone
as a newbie-you think 1.5% is cheap
then you discover ones 1/6 the cost
Posted on 12 February 2010 | Love 0 loves
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272Swarbs posted
Yep, and that's what some of the fund companies rely on to rip people off. In fact, most people don't realise how much of a difference it can make, particularly with compounding.
For example, if you invest some money for 30 years and get a gross return of 9%, with charges of 1.5% that makes a net return of 7.5%. So after 30 years your investment has grown to 8.75 times its original size. However, if charges are 0.27%, that makes a net return of 8.73% and after thirty years your investment will have grown to 12.3 times its original size! Which means that if you invest for 30 years at 1.5% instead of 0.27%, the fund company charges you 3.5 times your original investment in additional fees!!
Posted on 12 February 2010 | Love 0 loves
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7compound200 posted
amazing stat that swarb
most investers have no comprehesion of how these small percentages make a huge diff
Posted on 12 February 2010 | Love 0 loves
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1pghargi posted
Hi 'compound2000', I saw a comment by you in another article where you mentioned that for investing in HSBC All-Share Tracker, you need to open an online bank account with them which costs 12.75 £ /month.Surely that cannot be right?
Anyone else already invested in it,please advise, as I have made up my mind in investing in it because of its recommendation on this website and low TER of 0.27%.
Posted on 14 February 2010 | Love 0 loves
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7compound200 posted
pghhargi
using hargreaves lansdown you can invest in this tracker TER 0.25% in isa
phone up--regular savings and they can set you up right away.no paperwork
Posted on 14 February 2010 | Love 0 loves
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7compound200 posted
annual charge is 0.25%
ter 0.27%
Posted on 14 February 2010 | Love 0 loves
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1pghargi posted
Hi Compound2000, thanks for pointing me in HL direction.BUT If I want to invest through their ISA here(Vantage ISA) the key features states that minimum investment is 3000 GBP. I want to initially only put away 1 or 2K at most.
Any other FTSE All-Share trackers(TER ~ 0.27%) without any such stipulations?
Posted on 16 February 2010 | Love 0 loves
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7compound200 posted
if you start as regular saver isa--you can start with £50 a month
Posted on 16 February 2010 | Love 0 loves
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