The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Aurora on September 21, 2012, 06:04:54 PM
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Can any one out there suggest suitable UK equivalents of MMM's recommended Vanguard index funds. I am new to investing in Stock Market and have made some tentative investments in UK shares, mainly coattailing the buys of some of the so called best UK fund managers. However I really just want to invest something each month without having to ponder too much on it.
I currently have a TD Direct regular investment ISA which I think I can use to invest in funds.
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I would also very much like to know about this one. The UK vanguard has some similar looking ones, but I am not sure they are actually the same.
Also it looks like they have a minimum deposit of £10k
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Hi,
The lowest cost UK index funds are generally provided by Vanguard and HSBC. They are the same class of passive investing, index-tracking product as recommended by MMM, though they're not the same funds as they're meant for UK investors.
There is a lot of confusion about minimum investment levels in Vanguard funds. You'll often see the figure of 100K floating around. This is false. You can invest in Vanguard funds for as little as £50. The 100K figure crops up because if you tried to give your money straight to Vanguard then they'd ask you for a minimum of 100K. However, if you go through an online broker like Alliance Trust or Hargreaves Lansdown (which is what Vanguard want you to do) then your minimum stake is £50.
You can't buy Vanguard through TD Investing yet. However you can get the HSBC index funds through TD. Also look out for L&G funds. In both cases, look for the word 'index' in the fund name. There are tons of HSBC and L&G funds out there, many of which have high fees, but the low cost versions will be called index funds e.g. HSBC FTSE All-Share index funds.
Look out for the Vanguard LifeStrategy funds if you want to keep things really simple. These are like investment party packs. The equivalent of several funds in one. It's an easy way for investors to hold a diversified range of investments in one fund without having to do a lot of legwork.
A good book on the subject is Smarter Investing by Tim Hale - it's specifically written for a UK audience.
Hope that helps.
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Thank you Mr Accumulator, that's really helpful. I will check out he book you recommended too.
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My pay check comes in next week, and I was ready to go for my first lot of index funds, then I came across a company called Fidelity.
https://www.fidelity.co.uk/investor/research-funds/fidelity-funds/moneybuilder-funds/moneybuilder-uk-index.page
This looks to be a very similar offering to halifax, but can be done as an ISA, so its a good option, or am I missing something?
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See also the Bogleheads wiki page on UK investing.
http://www.bogleheads.org/wiki/UK_Investing
All of the major brokers offer ISA packages, so don't limit your choice based on that.
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Hi There
There is a really good overview of all UK passive investment options on monevator.com it is UK based and I found it really useful when setting up my investment plan. They have a whole section on passive investing, and a summary of the cheapest UK funds for each asset class, including vanguard and competitors. It's really worth a look.
If you haven't already read it, I found Tim Hale's book 'smarter investing' really useful to. It'd UK focused and give a nice introduction to the whole passive investment approach and how it implement it in the UK. It can be a bit heavy in places, but if you are going to invest it's good to have an understanding of what't involved.
I buy vanguard funds every month through an online broker called Alliance Trust. It costs UKP 1.5 per trade, and is the cheapest way to access vanguard funds, although I think the ETFs are available through other brokers. You could start with the Vanguard All World ETF and team it up with their Global Bond Fund. If this is confusing just have a read around on monevator to clarify things.
Finally, if you really want some help, I talked to a firm based in the UK called Rutherford Wilkinson, in the end they couldn't work with me as I am currently based abroad at the moment, but they were very helpful all the same. They only follow a passive investment approach and are not stupidly expensive as far as advisers go.
I only started all this investment business last year, but did quite a lot of reading around the subject from a UK perspective so feel free to ask any questions, and I might be able to save you some time! Really though, the monevator site is a better source of information than I am!
Good Luck!
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here's another though (since I live in France and have had similar questions):
Why not just invest in the Vanguard Index in the US?
Since these days payments just go over the internet/ credit card transfers and whatnot, Im just going to buy Vanguard Index directly in the US.
Si there something that limits purchases to only US citizens? that would be hard to believe....?