A New ETF in town
So last week Vanguard announced an ETF version of my favourite fund, the Vanguard FTSE Global All Cap. I’ve had this fund for years now with all of my LISA and ISA invested entirely in it. Just a hair under six figures invested between them.
The fund version has had an ongoing charge of 0.23% which by comparison does seem a little high compared to others on the market. But the fact that it includes small cap stocks makes it quite unique.
The new ETF version has an unbelievable 0.07% ongoing charge. That is more than 3Xs cheaper. Or another way to look at it is the fund costs over 300% more. Yeah, that sounds much more like a news headline!
So with almost £100k in this fund I decided to run the numbers and see just how much this new ETF version would save me. If we calculate the costs based on a £100k portfolio, here are the annual charges.
Fund - £230
ETF - £70
Savings - £160
Not massive on a six figure portfolio, but that money remains invested and compounds so definitely a welcome bonus. If we take my £42 annual platform fee and the ETF charge my ongoing total charge on my LISA portfolio is just 0.117%.
Providers
Over 90% of my portfolio is held in my LISA. Yeah you read that right not a SIPP or an ISA, but a LISA. Back in the COVID days of 2020 I had some time on my hands and optimised my growing LISA portfolio by moving to a new provider. I moved away from HL and their uncapped platform charge over to EQi with their £40 a year flat fee platform charge - which also included no fees for investing in funds. Ideal. The only issue is that they charge £5.99 for each ETF purchase. Not ideal.
So the hunt began for a new LISA provider that had the lowest fees for a large portfolio based on ETFs. There were really only two other options, back to HL or over to AJ Bell. Ultimately AJ Bell won as they have a platform fee cap of £42 a year and no fees for regular investing of ETFs. Essentially what EQi are for funds, they are for ETFs. So I have now opened a LISA with them and initiated the transfer from EQi. Hopefully this goes much smoother than my transfer from HL to EQi where I had to cash out and was out of the market for months. Both platforms have the fund I am invested in so I should have an in-specie transfer of my fund holdings which keeps me in the market during the estimated 6-8 week transfer. Once the transfer is complete I’ll sell the fund, and buy the ETF. It’s a bit nerve wracking selling such a large portfolio, but it will be saving me thousands of pounds over the next almost three decades.
My ISA provider Prosper just announced this week they now have the ETF as well So I have just sold my ISA, almost £5k which was also in the fund version and will purchase the ETF when the cash is available. My total ISA fee will be only 0.07% since Prosper are a zero fee platform.
My SIPP is also with Prosper and invested in the Fidelity World Index Fund. Currently Prosper refund the fees of this fund back into my account annually so I’m undecided if I will keep that fund or also sell and buy the ETF. If I keep it as it currently stands, my SIPP fee is an insane 0%. It could also be interesting to see how the large and mid caps perform against also holding small caps.
Roundup
So that’s the latest portfolio update from me. I now have six figures across all my accounts which feels insane. It’s the first major milestone but in some ways only the true beginning as compounding really kicks in. What will be truly eye watering to me is when my LISA hits six figures and to see that many digits in a single account.
Having both my ISA and SIPP with Prosper allows me to see my total portfolio across both accounts and then also individually. I like this, as I contribute to both monthly it really does feel like it’s growing seeing that total number increase by almost £600 a month from my own contributions. It was a nice little milestone to see those accounts cross £10k combined recently too. Next step is to hit £10k in each account.
Until next time, happy investing.
