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Problems with passive investing

Index tracking funds and ETFs
GeoffF100
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Re: Problems with passive investing

#391733

Postby GeoffF100 » March 3rd, 2021, 8:13 am

tjh290633 wrote:It's a great pity that buying Gilts through the National Savings Register was terminated. Very convenient through any Post Office, and low charges. It was a bit like dealing with Unit Trusts or Oeics, that you didn't know the price until it had happened.

It was much more expensive than buying through a broker. The DMO has a new scheme with Computershare:

https://www.dmo.gov.uk/responsibilities ... e-service/

The price of the serfvice is well hidden. There is probably a reason for that.

tjh290633
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Re: Problems with passive investing

#391780

Postby tjh290633 » March 3rd, 2021, 10:48 am

GeoffF100 wrote:The price of the serfvice is well hidden. There is probably a reason for that.

Yes indeed. Looking at the old charges, £12.50 minimum compares rather unfavourably with about £5 for purchases. For a sale of about £1,000, £7 compares with about £5, but I don't have records for any higher or lower priced deals.

TJH

1nvest
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Re: Problems with passive investing

#391831

Postby 1nvest » March 3rd, 2021, 2:02 pm

jonesa1 wrote:Using TREASURY 0.125% INDEX-LINKED 2024 as an example. HL shows the current price as Sell:£107.35 Buy:£112.35 (which is a pretty large spread!).

It's common to see such wide spreads being generally quoted on the secondary market by brokers (distance from market). When it comes to actual trading you'll tend to see better figures, where the spread narrows down for larger amounts being bought/sold. Above £100K for instance and generally the spread/cost will be very tight as you'll more likely be put through to very close to the actual market. Another factor however is that telephone trades typically involve a higher fee being charged, maybe £100 instead of £10 for a online/internet based trade.

dealtn
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Re: Problems with passive investing

#391833

Postby dealtn » March 3rd, 2021, 2:21 pm

1nvest wrote:
jonesa1 wrote:Using TREASURY 0.125% INDEX-LINKED 2024 as an example. HL shows the current price as Sell:£107.35 Buy:£112.35 (which is a pretty large spread!).

It's common to see such wide spreads being generally quoted on the secondary market by brokers (distance from market). When it comes to actual trading you'll tend to see better figures, where the spread narrows down for larger amounts being bought/sold. Above £100K for instance and generally the spread/cost will be very tight as you'll more likely be put through to very close to the actual market. Another factor however is that telephone trades typically involve a higher fee being charged, maybe £100 instead of £10 for a online/internet based trade.


the DMO service linked above

https://www.dmo.gov.uk/responsibilities ... e-service/

has a quote of 109.80 / 109.90 (for 02/03/21) as a means of comparison

GeoffF100
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Re: Problems with passive investing

#391886

Postby GeoffF100 » March 3rd, 2021, 4:29 pm

The commission charges are here:

https://www.dmo.gov.uk/responsibilities ... s-answers/

I make that £391.25 commission on a £100K deal. Ouch! I paid £5 to speak directly to the dealer over the telephone with iWeb. Judging from the day's trades, I think that my spread was more than that quoted by the DMO, but I still believe that I did better overall with iWeb.


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