How does one compare index-tracking ISAs?

[fivemack]

The aim is, in the further reckless pursuit of responsible frugality, to put £100 monthly into an index-tracking ISA. I presume that I can do this despite having put £3000 into a mini cash ISA this tax year.

So I google for 'index-tracking ISAs', and get the impression that these are less well-catalogued by independent sources than cash ISAs; fool.co.uk has a list of index-tracking ISAs consisting entirely of sponsored links. Google is a little better, and I come up with a few fund-management companies and grovel around further.

M&G Index Tracker A	0.30% annual charge	Tracks FTSE All-Share; "dividend type: distributing"; "regular saving scheme: yes"
L&G UK Index	0.53% annual charge	Tracks FTSE All-Share; doesn't say anything about dividends
Fidelity Moneybuilder UK Index Fund	0.1% management charge	Tracks FTSE All-Share; doesn't say anything about dividends; minimum investment "500, top-up 250"

This would seem to be an easy decision, so I must be missing something. I can't work out what 'dividend type: distributing' means: obviously I want dividends to be reinvested.

On a third hand, given how the pricing of computers and cameras has historically behaved just after I finally decide to buy them, and how the pricing of equities has historically behaved just after I lose confidence and sell everything, maybe I should stay in cash until the unprecedentedly well-correlated set of handbaskets that seem to be making up the international markets proceed up the roller-coaster


to that place where all handbaskets are proverbially destined.

Comments

[stephdairy.livejournal.com]

With Legal and General there's a choice of Accumulation Units or Distribution Units. Accumulation Units do the reinvestment thing, whereas Distribution Units pay out your net income by BACS.

(S)

[vicarage.livejournal.com]

Avoid L&G, they made a complete mess of my Tessa. One of my top 5 most hated companies.

I've been with M&G for 15 years, and they are very good. They reinvest my dividends

[aldabra]

When you find a good ISA will you tell me what it is please?

[papersky.livejournal.com]

You want to extend that graph to ten or even better twenty years, but you're absolutely right that buying at the top is seldom a good idea. Is this the top? Well, could be.

The best basic financial advice, after "don't ever have more than a third of your investments in the market", is "don't micromanage". Think in terms of the long term. Short term (5 years is short) money should be in the building society or in gilts or GIBs.

Fidelity run a set of managed unit trust portfolios. Look at their twenty year performance if you want a decent comparison.

Of those three, I'd be looking at the M&G, but I'd also be looking to see if Friends Provident do one and if so how theirs compares. They were doing ethical investment (and making a bomb at it) before anyone else.

Not a FIMBRA member. (But heck, what can they do to me at this distance?) Information out of date. Never had any capital, so knowledge entirely derived from experience with other people's money. Close cover before striking. Do not baboon.

[carbonel]

Any chance you could put this behind a cut tag? It's doing weird things to the width of my page.

[arnhem.livejournal.com]

The cashier in the Cambridge B.S. today was trying to entice me into something that doesn't appear to be listed on their web site, and so presumably is another financial service provider's product that they're pushing (annoyingly, I didn't check the advertising bumph I was shown closely enough, so don't know whose it was).

It claimed to be a 3 year ISA-able bond (no withdrawal in that period; you can transfer to it from an ISA, and on maturity back to an ISA) with a 10% guaranteed rate tax-free, but FTSE-tracking as well (and mutterings of "up to 30%" associated with that).

I don't think I'd particularly care if it never went above 10%, to be honest (although I suppose that base rates could easily go there in the next three years, so perhaps it's not even quite as good a deal as it appears).