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Vanguard ISA?

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
swill453
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Vanguard ISA?

#396858

Postby swill453 » March 18th, 2021, 5:39 pm

If someone (not me) wanted to open an ISA, deposit £20,000, invest it in, say, a Vanguard Lifestrategy fund, and keep it forever with no more transactions, would doing it direct with Vanguard be the best way to minimise charges?

And repeat the same question but with investment in a Vanguard accumulation ETF?

Scott.

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Re: Vanguard ISA?

#396864

Postby Bubblesofearth » March 18th, 2021, 5:57 pm

swill453 wrote:If someone (not me) wanted to open an ISA, deposit £20,000, invest it in, say, a Vanguard Lifestrategy fund, and keep it forever with no more transactions, would doing it direct with Vanguard be the best way to minimise charges?

And repeat the same question but with investment in a Vanguard accumulation ETF?

Scott.


Good question. Vanguard charge 0.15% p.a. which looks low but is capped at £375 which is quite high. Youinvest, in contrast, charge 0.25% p.a. but is capped at £3.50 per month. So for small amounts Vanguard will be cheaper but for larger amounts Youinvest is cheaper. I'm quoting Youinvest simply because that's the platform I use. Other platforms might be worth exploring for lower charges.

At least that is my reading of the charge structure.

BoE

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Re: Vanguard ISA?

#396868

Postby TedSwippet » March 18th, 2021, 6:10 pm

swill453 wrote:If someone (not me) wanted to open an ISA, deposit £20,000, invest it in, say, a Vanguard Lifestrategy fund, and keep it forever with no more transactions, would doing it direct with Vanguard be the best way to minimise charges?

And repeat the same question but with investment in a Vanguard accumulation ETF?

For these fact patterns, iWeb would probably work out the cheapest. £100 to open, £5 to purchase, and nothing more to pay. There are no cheaper flat-fee platforms, and the cheapest percentage-based platform is Vanguard. Vanguard's 0.15% would be £30/year on £20,000, so iWeb wins over Vanguard after three and a bit years.

Assuming of course that iWeb platform fees don't rise, Vanguard's don't fall, "forever" is at least three and a bit years, really and absolutely "no more transactions", and so on ...

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Re: Vanguard ISA?

#396870

Postby swill453 » March 18th, 2021, 6:13 pm

Bubblesofearth wrote:Good question. Vanguard charge 0.15% p.a. which looks low but is capped at £375 which is quite high. Youinvest, in contrast, charge 0.25% p.a. but is capped at £3.50 per month. So for small amounts Vanguard will be cheaper but for larger amounts Youinvest is cheaper. I'm quoting Youinvest simply because that's the platform I use. Other platforms might be worth exploring for lower charges.

At least that is my reading of the charge structure.

I believe that cap would apply to an ETF at Youinvest, but not a Lifestrategy fund.

Scott.

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Re: Vanguard ISA?

#396900

Postby GeoffF100 » March 18th, 2021, 8:13 pm

TedSwippet wrote:
swill453 wrote:If someone (not me) wanted to open an ISA, deposit £20,000, invest it in, say, a Vanguard Lifestrategy fund, and keep it forever with no more transactions, would doing it direct with Vanguard be the best way to minimise charges?

And repeat the same question but with investment in a Vanguard accumulation ETF?

For these fact patterns, iWeb would probably work out the cheapest. £100 to open, £5 to purchase, and nothing more to pay. There are no cheaper flat-fee platforms, and the cheapest percentage-based platform is Vanguard. Vanguard's 0.15% would be £30/year on £20,000, so iWeb wins over Vanguard after three and a bit years.

Assuming of course that iWeb platform fees don't rise, Vanguard's don't fall, "forever" is at least three and a bit years, really and absolutely "no more transactions", and so on ...

A further factor is growth in the LifeStrategy fund. If the value of your holding doubles, the cost doubles at Vanguard. If it halves, the cost halves. I expect that Vanguard's cost will come down over time. 0.15% not competitive currently, except for very small accounts. iWeb, I fear, will increase its charges over time.

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Re: Vanguard ISA?

#397024

Postby gryffron » March 19th, 2021, 10:32 am

GeoffF100 wrote:I expect that Vanguard's cost will come down over time. 0.15% not competitive currently, except for very small accounts. iWeb, I fear, will increase its charges over time.

Whilst that is always possible, it's pure speculation. iWeb (and Halifax) have had zero platform fees for funds for a very long time now. Over a decade to my knowledge.
Many new fly-by-night brokers have come and gone in the meantime. We have to go with what we know.

Gryff

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Re: Vanguard ISA?

#397050

Postby Hariseldon58 » March 19th, 2021, 11:16 am

Halifax Share Dealing are cheap..

They are changing the system , fixed cost of £3 per month plus dealing, in the scenario given just one purchase...

No Ad Valorem fees.

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Re: Vanguard ISA?

#397203

Postby GeoffF100 » March 19th, 2021, 6:42 pm

gryffron wrote:
GeoffF100 wrote:I expect that Vanguard's cost will come down over time. 0.15% not competitive currently, except for very small accounts. iWeb, I fear, will increase its charges over time.

Whilst that is always possible, it's pure speculation. iWeb (and Halifax) have had zero platform fees for funds for a very long time now. Over a decade to my knowledge.
Many new fly-by-night brokers have come and gone in the meantime. We have to go with what we know.

Yes, it is pure speculation. To be fair to Vanguard, there fees are more reasonable if you have a SIPP in addition to an ISA. Nonetheless, the majority of the market does not have SIPPs. Chasing the tiddlers does not appear to be the best strategy for Vanguard. Fees tend to fall over time anyway, so I believe my expectation there is reasonable, but I do not know what will happen.

As far as iWeb is concerned, I do not even have an expectation. I simply do not know what will happen. HSDL has just had a round of price increases and us tight wads at iWeb escaped unscathed, so perhaps they still believe in the low cost model. Nonetheless, Barclays ramped up their charges. If you have open ended funds in an iWeb dealing account, you need a Plan B if they do slap on a platform fee.

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Re: Vanguard ISA?

#397205

Postby Lootman » March 19th, 2021, 6:53 pm

GeoffF100 wrote:To be fair to Vanguard, there fees are more reasonable if you have a SIPP in addition to an ISA. Nonetheless, the majority of the market does not have SIPPs. Chasing the tiddlers does not appear to be the best strategy for Vanguard. Fees tend to fall over time anyway, so I believe my expectation there is reasonable, but I do not know what will happen.

I think it is reasonable. A quick look at Vanguard's US pricing structure shows the following:

1) They have zero commissions for trades on stocks and funds.
2) There is no platform fee or management fee, whether the account is taxable or not.
3) There are no minima other than whatever the individual fund minimum is, which is typically a few hundred.

In other words it is totally free to invest with Vanguard, other than fund AMCs.

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Re: Vanguard ISA?

#397206

Postby GeoffF100 » March 19th, 2021, 7:04 pm

Lootman wrote:
GeoffF100 wrote:To be fair to Vanguard, there fees are more reasonable if you have a SIPP in addition to an ISA. Nonetheless, the majority of the market does not have SIPPs. Chasing the tiddlers does not appear to be the best strategy for Vanguard. Fees tend to fall over time anyway, so I believe my expectation there is reasonable, but I do not know what will happen.

I think it is reasonable. A quick look at Vanguard's US pricing structure shows the following:

1) They have zero commissions for trades on stocks and funds.
2) There is no platform fee or management fee, whether the account is taxable or not.
3) There are no minima other than whatever the individual fund minimum is, which is typically a few hundred.

In other words it is totally free to invest with Vanguard, other than fund AMCs.

I am talking about the Vanguard UK fees:

https://www.vanguardinvestor.co.uk/what ... -explained

That is £375 p.a. for Vanguard versus £0 p.a. for iWeb if you just have a sizeable dealing account and/or ISA. You have to pay £5 to trade at iWeb versus nothing at Vanguard, but that should not amount to much for a LTBH passive investor.

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Re: Vanguard ISA?

#397208

Postby Lootman » March 19th, 2021, 7:13 pm

GeoffF100 wrote:
Lootman wrote:
GeoffF100 wrote:To be fair to Vanguard, there fees are more reasonable if you have a SIPP in addition to an ISA. Nonetheless, the majority of the market does not have SIPPs. Chasing the tiddlers does not appear to be the best strategy for Vanguard. Fees tend to fall over time anyway, so I believe my expectation there is reasonable, but I do not know what will happen.

I think it is reasonable. A quick look at Vanguard's US pricing structure shows the following:

1) They have zero commissions for trades on stocks and funds.
2) There is no platform fee or management fee, whether the account is taxable or not.
3) There are no minima other than whatever the individual fund minimum is, which is typically a few hundred.

In other words it is totally free to invest with Vanguard, other than fund AMCs.

I am talking about the Vanguard UK fees:

https://www.vanguardinvestor.co.uk/what ... -explained

That is £375 p.a. for Vanguard versus £0 p.a. for iWeb if you just have a sizeable dealing account and/or ISA. You have to pay £5 to trade at iWeb versus nothing at Vanguard, but that should not amount to much for a LTBH passive investor.

Yes, I know we were talking about UK fees. But you suggested that Vanguard were heading towards lower fees and it is instructive in that regard to look at their fees in their homeland, as I believe that is the direction they will head in in the UK as they grow assets under management. Vanguard is all about reducing investor costs in order to build AUM.

But sure, for now, iWeb may be cheaper. I know nothing about iWeb. I am with interactive investors which charges me £2 a month platform fee after my monthly free trade, for two accounts. As a percentage of the value I have with them, that is negligible.

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Re: Vanguard ISA?

#397217

Postby scrumpyjack » March 19th, 2021, 7:58 pm

One point about Vanguard is that it is owned by its funds, not by any outside shareholders, and so has as one of its objectives being as low cost as possible. It is not out to maximise profit in the long term, which every other ISA manager will be. So fees at Vanguard are more likely to reduce than increase.

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Re: Vanguard ISA?

#398446

Postby daducky » March 23rd, 2021, 9:19 pm

I've got a bunch of Vanguard ETFs ~£30ks worth in an ISA.


Glb Sml Cap Acc IE00B3X1T05. Grew now in decline
Life Strat Acc. 60% Didnt grow v fast...Sold it after some months
VFEM.
FTSE100 Acc. Among the best
VMID. Not bad
VWRL_Global. Cant remember
VAPX. Not much growth
VERX. Volatile
VEVE. Volatile
VNRT. Among the best
VUCP. Dove for a long time, with occassional small rises before falling agaim.
Cash. Not much

I've recently bought

VJPN +
High yield

So i'll see how they do.

One bad thing about Vanguard is tthe tend to be heavy on the geographic and consequently light on the sectoral offerings. Also many of the contructs available to the American market presumably are not acailable on the uk vanguardinvestor site which is disappointung, particularly.aggregating variations of ETFs. I find this especially surprising as V.i. markets itself as home for investors ratger than traders. Thus one would think aggregate etfs would be more readily available.



As a separate point i 've noticed for the past few days, most of tbem.seem to be liosing value. Anyone know why? I think theres some macroecon trend i'm missing.


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