UK Investor - IWEB Share Dealing query.

[Spud]

Novice investor posting for the first time, so bear with me.

Has anybody got any experience investing through IWEB as their broker?

I'm attracted by the £5 fees which will be lower in the long run than % charges. I also note they have a £5 for dividend reinvesting.

How can I tell how often a fund pays dividends? Is it always quarterly?

This is the fund that I'm interested in starting out with.

Vanguard FTSE U.K. Equity Index Acc (ISIN GB00B59G4893).

I'm looking on Morningstar but can't see anything about dividends.

[rach]

I use iWeb. Don't know the answers to your questions but they have an incredibly helpful live chat service through their website. It's only open in business hours but every time I've used it, whether for help finding information on a fund or querying a charge to my account, they've been supremely helpful. I recommend asking them.

[Spud]

Cheers Rach. I've just had a chat with them online and then phoned them for a chat.

Question for anyone who can help.

If you wanted to find out how often a particular fund pays dividends, how would you go about it?

I've tried phoning the broker and they don't know, and I've tried phoning Vanguard but they are shut for the day.

I want to know because the broker (IWeb) charge 2% of the dividend payment, up to a maximum £5, to reinvest the dividend for you.

As I plan to invest in the accumulation fund, I don't want to be facing really frequent charges. If it was going to happen no more than a handful of times a year, I'd be more than happy with that.

[Spud]

I guess I'm looking for something like the link below, but for UK index funds.

https://www.vanguard.co.uk/documents/portal/legal/etf-distribution-schedule.pdf

[Mwstas]

I used this Monevator analysis of the various brokers when deciding who to go with. Based on my portfolio size (small) I went with Charles Stanley Direct. No complaints thus far! Once my portfolio grows it's likely I'll switch to a fee based broker.

ETA: The Monevator site is really good for UK-centric investment advice. Check out the article on passive income for advice on a range of related topics including low cost index trackers.

[PovilasP]

I want to know because the broker (IWeb) charge 2% of the dividend payment, up to a maximum £5, to reinvest the dividend for you.

That's NOT true. You misinterpret facts:

Dividend Reinvestment Charges
Top
Reinvestment of dividends is charged at 2% of the value of the deal, capped at the appropriate trading commission for that deal. Please Note: Dividend reinvestment is subject to Stamp Duty.

So, just set up it not to be reinvested.

You have these options:
Dividend Handling   
Please select how you would like dividends to be handled on each of your accounts.
'Automatic Dividend Reinvestment' will enable dividends from UK and Irish CREST eligible stocks to be automatically reinvested into the source stock. Any remaining cash will be paid into your share dealing account. Please note a 2% commission (maximum £5) is payable on all dividend reinvestments.
'Hold In Account' will retain the dividend in your share dealing account until you take further action. (I've selected this one)
'Pay Away Immediately' will send collected dividend totals to your nominated bank account shortly after the dividend pay date.
'Pay Away 6-Monthly' will send collected dividend totals to your nominated bank account every 6 months, usually at the end of April and October of each year.

Also you SHOULD check this thread http://forum.mrmoneymustache.com/investor-alley/uk-investor/

Your index is not available as etf, but available as simple fund https://www.dropbox.com/s/7skoat5hrj6139s/Screenshot%202014-10-12%2010.52.01.png?dl=0

P.S. I haven't yet received dividends, because my account is a month old only. But I've pasted the rules from their website.

[PovilasP]

And one more thing, Quote:
If you buy or sell any investments over £10,000 you pay a levy of £1.00 to the Panel of Takeovers and Mergers (PTM). When you buy investments you also have to pay a form of tax called Stamp Duty. This is 0.5% of the value of the investments you buy (1% on Irish Stocks and 0% on Exchange Traded Funds).

It sounds like it's not IWeb taxes, but the UK country taxes. Unavoidable.

Maybe there is more knowledgeable guys to explain how it is applied to Vanguard funds vs Vanguard etfs? But etfs for sure has zero taxes, that's why in previous post I've noted that there is no such etf as you wish. And also, that's why I bought only etfs so far.

Anyway 0,5% if is applied in buying and selling it makes total 1%. But that's not compounded interests, payed only once. Also, there is 0,4% just for buying the fund itself (Vanguard tax). Also 0,8-0,25% yearly depending on fund and etf you've selected.

[PovilasP]

Also, there is two fund for every index. Income and Accumulation https://www.vanguard.co.uk/uk/portal/investments/mutualfunds I believe accumulation will automatically reinvest dividends without any taxes, because the money goes back to fund directly, without reaching your account.

But someone should confirm it, because it's only my guess.