Where can I find a monthly savings plan investing in an index fund?

LHikey on 12/05/2014 - 19:23

Hi OzBargainers,

I am looking for a financial institution or bank that offers a monthly saving plan into an international index fund.

Westpac offers a similar saving plan, called BT Investor Choice Funds, and I also found a similar product from AMP (they call it Flexible Lifetime Investments). Both companies do however only offer a saving plan into managed funds, not index funds.

This is, in more detail, what I am looking for:

  • Initial minimum investment $2.000 or less
  • Regular monthly contributions into the savings plan of $100 or more
  • No setup, contribution or withdrawal fees
  • Contributions into an index fund, like MSCI World or similar
  • Low management fee (less than 1% p.a. would be good)

I really like those regular saving plans, because they allow you purchase a small amount of shares on a monthly basis without paying a $15 trading fee each time. The reason why I do not want to regularly invest into a managed fund is that I made the experience that most fund manager are not doing a good job in delivering a better return than the market/index. Especially when you consider their management fee of usually more than 2% per year. So ideally I would like to regularly invest fee-free into a non-managed fund that is just copying an index.

Anyone knows a bank that offers such a saving plan? Thank you!!

Financial

Comments

  • mskeggs on 12/05/2014 - 20:58

    Vanguard offer low fee index funds.. Not sure if they do the monthly thing.

    • jackofspade on 12/05/2014 - 23:37
      +1

      https://www.vanguardinvestments.com.au/retail/ret/investment…
      min investment $5000
      min additional investment by BPAY $100

      • Devils Advocate on 13/05/2014 - 01:01

        Yes, but the returns on that specific fund aren't too hot. 1.86% pa since 1998 before fees

        • mskeggs on 13/05/2014 - 07:07
          +3

          Well, you can't have it both ways. If you choose to invest in an index, you need to accept the index won't always return as much as you hope!
          The OPs issue will be the $5k minimum for Vanguard, otherwise their funds tick the boxes.

        • Hikey on 13/05/2014 - 08:05

          The initial investment is a little bit high. I want to set up two saving plans for my kids, but I don't have $10.000 laying around.

        • mskeggs on 13/05/2014 - 18:37

          If you can get to $5k, start one off, then split it when it hits $10k.

  • p1 ama on 12/05/2014 - 22:38

    Sign up to Commsec and buy an ETF (exchange traded fund), buy one that is based off the ASX 200 index.

    I personally like the SPDR one. It's ASX code is STW.

    Disclaimers - I'm finance educated at a university level and have a portfolio of ETFs including the one I recommended.

    • mskeggs on 13/05/2014 - 07:08

      The OP wants to invest small amounts regularly, which would get eaten up with brokerage in an ETF. Perhaps if they could save up and buy once a year? But then they lose the benefit of dollar cost averaging.

      • Hikey on 13/05/2014 - 07:43

        Yes, it's also the dollar cost averaging that I am after.

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