In this video I chat through 2 mistakes I made when investing with Vanguard UK ISA. I started investing with Vanguard UK a while back and have really loved using the platform. Vanguard is a market leading investment platform, Vanguard index funds are outstanding selection of high-quality, low-cost mutual funds and ETFs, making them perfect for beginner or long term investors.
When i first started i stumbled across a few issues that I wasn’t aware of as a new investor. So as a warning for Vanguard UK investors in 2021, if you are considering investing with Vanguard UK for your ISA consider these mistakes i made:
Rule NO.1 : No Fractional Shares – only with funds, not ETFs.
On Vanguard UK you cannot purchase fractional shares. Most 0% commission platforms these days such as Trading 212 and FreeTrade allow you to purchase fractional shares, however on Vanguard they don’t allow this on many of their products. It is also not very clear on the platform so when I first auto invested onto the Vanguard platform, it moved additional funds into the cash pot.
Therefore when allocating money to various ETFs and funds on Vanguard UK, check that the amount you have allocated with cover to cost of a fund ETF share.
Rule NO.2: When purchasing ETFs buy ‘next available trade price’ NOT ‘live price otherwise you will be charged £7.50.
As I had accumulated a small cash holding within my ISA i wanted to invest it into an ETF. By selecting Live price, as you would on Trading 212/ FreeTrade etc, you will then incur a cost of £7.50 for that trade. I selected Live price first time round and ended up being charged £7.50, which really made the trade not worth it as the ETF was valued at approximately £50.
I hope these two flags are clear and you don’t make the silly mistakes that i did when i first used Vanguard UK! If you have any other questions regarding fractional shares or additional fees then please do let me know down below!
Short outline of my Vanguard portfolio below:
1. LifeStrategy 80% Equity Fund – This particular Vanguard Lifestrategy fund will allocate 80% of its capital on equities, and the balance on bonds. This Vanguard portfolio is made up entirely of Vanguard funds.
2. Global Emerging Markets Fund – If you have a slightly higher appetite for risk, then you might want to consider Vanguard Global Emerging Markets Fund. As the name suggests, this Vanguard fund focuses most of its efforts on the emerging markets and includes China (31.4%) & Taiwan (12.4%).
The fund also gives you exposure to bonds issued in Korea, India, Russia, Hong Kong, and Brazil.
3.FTSE ALL-WORLD UCITS ETF (VWRL) – This Vanguard Index Fund uses the FTSE All-World Index. This “measures the market performance of large- and mid-capitalisation stocks of companies located around the world. It includes approximately 2,900 holdings in nearly 47 countries, including both developed and emerging markets. It covers more than 90% of the global investable market capitalisation.”
4. VUSA – S&P 500 UCITS ETF – This Vanguard Index Fund contains 500 large-cap firms that are listed on either the New York Stock Exchange or NASDAQ. In the 9+ decades that the S&P 500 has been in operation, it has returned average annualised gains in excess of 10%. This Vanguard index fund weights its portfolio based on the market capitalisation.
Thanks for watching!!
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About me: Hey guys! My name is Helen and I live in London, UK – I studied Business Economics at university and have always had an interest in investing and personal finance. I am a freelancer in London and work for various start up food and drinks companies.
💰 DISCLAIMER – Any advice given in on my channel and in the video is for information and entertainment purposes only, and does not act as financial advice. All stock picks are for entertainment only and with any investment you should do your own research before investing.