In the UK: No Vanguard, which Index fund? Which online broker?

[friendlycanuck]

I'm a Canadian living in the UK. I'm a British citizen - I just mention also being Canadian in case opening a Canadian investment account would be the best result.

I just want to start parking my money into an index fund for my first work on my 'stash. From what I can tell, going with Fidelity and buying the HSBC FTSE 100 fund is my best option. It says minimum £1000 initial investment OR £50 a month. Can I just start with £50 then? Or does it need to be £1000 then £50 minimum after that? Not sure how this works and I can't stand reading the legalese that fills these sites. Is there anything inherently flawed with using Fidelity and buying the FTSE 100 as my only investment to begin with?

Is there an option for buying S&P 500 funds in England, or is it too expensive? Would it be easier to open a Canadian investment account?

I want to keep this as simple as possible. I don't have £1000 to throw down on it just yet, but I'll be tucking money away for this. A fund that I could throw a few hundred pounds into here and there would be ideal. If this is not an option, I can put it into a savings account and do a few lump sums a year. A dividend paying fund might be nice too, but index funds don't pay dividends do they? Does dividend investing bring better or returns, or are they just better perceived returns?

[Norman Johnson]

As far as which is better if you are an expat? You'll have to ask someone more qualified than me. But if you do open an investment account and buy Canadian, I suggest looking at CanadianCouchPotato's blog regarding Canadian index fund investing. Last time I looked, TD e-series were the cheapest in Canada.

[Sacadoh]

Why no Vanguard? Have you looked at Hargeaves Lansdown or Alliance Trust?

[Mr Mark]

Investing in a big company index like the ftse100  is certainly better than buying individual stocks. But even better would be a automatic balanced fund that has some bonds too. Most important to watch fees - avoid anything higher than 0.5%, and for basic index funds should be more like 0.2%

You'd think it would be worth Vanguard opening a business in Europe. I was so happy to get to the US so I could easily open a Vanguard account.

[strider3700]

along these lines I noticed that vanguard canada lists different funds and a lot fewer then vanguard.com does.   Does anyone know if this means as a canadian I can't invest in vanguard.com funds? 

[Enphuego]

If you have a brokerage account you ought to be able to buy Vanguard ETFs, which are that same thing.  You'll pay a brokerage fee up front, but the expense ratios on ETFs are lower so it works out if you are investing enough money at a time.

[ed]

Also, the FTSE 100 is somewhat diverse, but you might also consider the MSCI World ETF.  I'm in a similar situation to yourself, in that Vanguard sell exactly what I want to buy, but I'm not based in the US  - so I just roll up cash for a month or two, then buy another batch of MSCI World.  Not as good as having it automated, and not quite as cheap, but still a pretty good way to invest, and at least the broker's fee is a once-off.

[JamesAt15]

Did you check Vanguard's UK web site, www.vanguard.co.uk? It looks like they may not offer a brokerage service in the UK, but many of their funds should be available via other UK brokerages. So if you are keen on going with some of the Vanguard index funds, you may have local options. Their list of funds includes a US Equity Index fund, priced in GBP, so that might be one you would be interested in.

I just found out that many (not all) of the Vanguard funds can be purchased from brokerages here in Japan, including one I have an account with via my bank. Wow, nice, guess I can avoid all those overseas electronic fund transfers I was expecting to have to do. I am still reading the Intelligent Asset Allocator so I will be taking some time to review which funds I have access to and what a good allocation will be.

Cheers.

[Taffy]

Alliance Trust looks like a good option for Vanguard index funds in the UK. They charge a flat fee per trade rather than a percentage though, so it's probably worth saving up a lump sum to transfer in every six months or so, rather than drip-feeding a few hundred quid a month. Of course, the first £11,280 you invest (up to end of March 2013) should be within a stocks and shares ISA for maximum tax (and hassle) mitigation.