Getting money out of an Index Tracker ISA

[torata]

Most open ended funds have income versions. ETFs can get wide spreads and/or trade at big discounts or premiums to NAV. That does not happen with open ended funds. The professionals have the information to see what is happening. You do not. With ETFs you know the trade price, but you do not know whether it is fair.

Wider spreads are more likely on the smaller, lower volume, or niche ETFs. You can see the spread info for free on https://www.etf.com (not up to the minute of course).
Fair? There's a spread on any share, ETF or not.

torata

[xxd09]

For many years now I make my single yearly withdrawal (retd 20 years) by selling units from the 3 index trackers in my portfolio
2 equity funds and 1 bond fund -wrapped in ISAs and SIPPs -all Vanguard funds-this withdrawal tops up my living expenses cash account
Interactive Investor platform only
Simple procedure-sell required number of units from chosen funds in the chosen tax free wrapper
Cash in the investment account in a few days -then withdraw via bank transfer-probably takes 7-10 days for whole procedure before monies in my current account
That’s it.
I tend to try and do this withdrawal during the “calmer” periods in the stockmarket (I suppose if you were caught out by a sudden stockmarket drop you could always repurchase the units-you would get more of them! and leave you cash withdrawal for a later date
Very flexible systems but obviously not set up for day traders-for that you need a stockbroker and they cost!
xxd09

[GeoffF100]

You can also trade unlimited amounts of money with open ended funds, but there are limits on the amount that market makers will trade.

Trading 'unlimited amounts' with open ended funds depends on their being sufficient liquidity. There is not always, as events in recent years have shown.

Yes, there will be an upper limit to what can be bought or sold. Nonetheless, Vanguard Developed World ETF VEVE has an Exchange Market Size of not much more than £100K. The liquidity of the underlying stock is very much more than that.

If an OEIC holds illiquid stock and there is deluge of sell orders, trading is suspended. With an ETF, trading continues, but at a big discount to NAV. If you do not realise what is happening, you can lose a lot of money. With an OEIC, you might be fine when liquidity returns to the market.

[GeoffF100]

Most open ended funds have income versions. ETFs can get wide spreads and/or trade at big discounts or premiums to NAV. That does not happen with open ended funds. The professionals have the information to see what is happening. You do not. With ETFs you know the trade price, but you do not know whether it is fair.

Wider spreads are more likely on the smaller, lower volume, or niche ETFs. You can see the spread info for free on https://www.etf.com (not up to the minute of course).
Fair? There's a spread on any share, ETF or not.

There is not usually a spread on OEICs or Unit Trusts nowadays (in Europe). There is swing pricing, but that can work for or against you.

[GeoffF100]

Interesting - AJ Bell say "There is a standard settlement period of four business days for unit trusts and OEICs."

Fidelity, when they include time to get it to a bank account, seem to say they can be slower still:

Settlement times
When payment is made
We usually make payments within seven business days of receiving your full and valid instructions although there are some differences with payments made on investments held outside an ISA wrapper, as follows:

Fidelity Cash Fund – we normally make payments within one business day
OEIC and Unit Trusts – we normally make payments within four business days
Investment trusts and ETPs – we normally make payments within two business days
Offshore Funds – we normally make payments within five business days
How payment is made
We will normally send the payment to your bank or building society account. Payments are usually processed via BACS, which can take up to two business days to show in your account.

https://www.fidelity.co.uk/legal/before-you-invest/

Vanguard says:

When you sell funds you'll need to wait for the trade to settle before you can withdraw the cash. This normally happens 2 business days after the trade completes.

https://www.vanguardinvestor.co.uk/need ... o-withdraw

Vanguard seems to be twice as fast as Fidelity. I wonder whether other money market funds settle quicker than the norm.