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  1. #1

    Beginner - Choosing a Good Fund with Low Charges

    An old company defined contribution scheme has come to an end and to cut my ongoing fees I've decided to transfer into a Cavendish managed account which i understand cuts down the ongoing costs of administration etc. (if anyone would like to explain how this occurs, that would be V helpful)

    What I need help with is finding a fund. I am aware that the charges take a big chunk, on top of the AMC (which i understand is deiscounted through Cavendish, and other providers), so i'm keen to find a fund which has low charges - preferably well below 1%.

    I was looking at the aegon funds, but they just seem to be funds of other funds. There are just a miriad of different funds with different names. How is a relative novice supposed to go through these and choose one, it's kind of pot luck??

    I am fairly young (31) so am happy to put the small pot i have in something at the riskier end, such as an emerging markets fund etc. But i'm finding it hard to compare funds across providers?

    Any help, tips and advice from people with experience would be a great help.

    Many thanks to all who reply!!

  2. #2
    If by 'providers' you mean fund managers, you could start by looking at funds in the Citywire Selection, and the Fact Sheets and League Tables section will give you loads of information in relation to ranking, ratings and performance for comparing purposes.
    Don't choose based upon short term performance, look for consistancy.
    If it's emerging markets you are interested in, First State and JP Morgan are regarded, especially First State, but other people might have different ideas (Aberdeen too, but I think it is now closed to new investments).
    Apologies if I've misunderstood.
    Good luck.

  3. #3
    Aberdeen is soft closed but available still via certain platforms eg Hargreaves Lansdown where I bought it a couple of weeks ago

  4. #4
    I moved out of Aegon 18 months ago, and I am happy with a HL SIPP

    Take care to find out all the charges on your Cavendish thing. For example when Aegon "managed" my account they charged a 1% pa for cash (that is they took 1% just for sitting on my cash), whereas HL pay me a small percentage !!!

    Take care they are not doing you for 1 or 2 percent THEN charging for the funds (bet they are).

    Dont trust anyone in this pool of sharks

    Cynical Moi?

    Seriously, find out all the charges and ins and outs. If too high, move!!

    Small percentages will make a massive difference to you over next 20 or 30 years.

    On Citywire you can look at all the funds, over a month 6 months, year, 3 years etc.

    Funds paying megabucks 18 months ago might be losing you 25% of your money now

    I dont know if Troy Trojan is closed now, but worth a look.

    Invesco Perp high income boring but seems to protect.

    One fund is no good, you need some spread, although some say dont have too many.

    look at bid offer spread, any small print extra costs like half a percent to buy in (Trojan do this but i dont care is it is one of the very few that actually makes money)

  5. #5
    The cheapest HL fund is SWIP FTSE All share, its only 0.31% but 2 a month platform, so that would be half a percent pa on 4000, 1% on 2000 etc

    ts doing ok for me, just bought some more

    Vanguard seem to perform but have 0.5% buy in and 2 platform etc

    when looking at the fudn listings you can click at top to rank by charges etc..

    When was cheapest ever the best?

  6. #6
    Its hard to get a handle on the charges as they are charged in bits and pieces.

    As far as i can see, Cavendish offer a rebate on the initial fee and also refund any ongoing comission charges. They also discount the AMC of the provider, so for Aegon instead of 1% it's more like 0.65%.

    I'm guessing the fund charges are on top of this? so if a fund charges 1%, then my total cost of management will be 1.65%. It soon adds up doesnt it. I notice some fund managers have funds that don't charge extra on top of the AMC. Perhaps i'd be better to use one of these at it'll save me a fair bit before i start.

    I looked at HL SIPP, but it seemed expensive to me, with comparatively high charges. Correct me if i'm wrong, but i think i was better off buying a fund through Cavendish than through HL or other SIPPs. Although i may open a SIPP in the future for other pension contributions, in which case it might make sense to put them all in one place.

    FEW!!! What a Minefield for a beginner!!! No wonder young people aren't interested, they dont have the time!!!!

  7. #7
    If you go to a GOOD financial adviser (paying them an upfront fee rather than ongoing charges) they will be able to give you practical advice and help with your choice. We've done this and for a relatively small fee we have set up a platform that gives us exactly what we need and we have the security of knowing that he is checking the funds regularly to make sure that they are still performing, contacting us to let us know about (free) movements between funds that have been made.

    Ours also assesses the level of risk we are prepared to accept - probably lower than yours since we are over 60 - and the funds are chosen with this in mind.

    Although we still pay fund management charges within the platform that he has set up, he also rebates what he is paid by the fund to us. You can hold funds inside or outside ISA's on this same platform, as well as pensions.

    Financial advisers sometimes get a bad press, but a good one is more than worth far more than their fee. They know the best ways to make the most of the tax (and pension) system and this allows you to make the most tax efficient use of the tax rules. It is also reassuring to know that you thoroughly understand what is being done and why, and to know that you will have their ongoing advice.

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