Moneybox portfolio allocation

#1

Whilst I still have a LISA with Moneybox in the interim (hopefully transfer that to Freetrade later if the fees make sense) can anyone offer any advice on their updated share allocation structure? It seems more ‘diverse’ because it now has more types of shares to allocate to, I’m just not sure what kind of weighting I should go for and perhaps make use of the customisation best I can.

Currently the allocation is like this:

It seems it will mean that my current shares will have to be sold and then reallocated, is it perhaps best to just stay put?

Goal would be still balanced/moderate growth. In the current structure the performance so far has been:

2 Likes
Hello, it’s newbie question time
(Kenny Grant) #2

Thanks for sharing, I think this is really instructive.

With small amounts of money:

  • You have made far more from this being a LISA than anything else
  • Little bonuses like moneybox rewards are worth having and have more impact
  • What you invest in at this stage doesn’t matter that much as long as it is diverse (not a single stock)
  • Your gain from investment is minimal (and that’s ok)
  • Your moneybox allocation doesn’t really matter
  • Fees are of outsize importance, and percentage fees are better (at this small amount)
  • ‘Earnings performance’ includes a whole lot of things which are not investment.

When you have more money saved up:

  • What you invest in starts to matter
  • Small bonuses don’t matter
  • Tax breaks are still important (even more so perhaps as contributions grow)
  • Low flat fees become ever more important (you don’t want to pay percentage fees on 100k)

So the good thing about this is you don’t have to think about allocation etc, the most important thing is to just keep saving. I’d be inclined to keep most of your savings in the LISA till you hit the limit, just for the tax breaks, as long as you’re ok with the limitations (you’re saving for a house deposit for example).

The bad thing is lessons learned at this stage won’t necessarily apply later on, when you have more money saved. The fee structure that suits low savings (low percentage fee, LISA) is not the same as that which suits high savings (low flat fee, ISA), and investment strategies are more important. Tax breaks are just as important though.

7 Likes
#3

I like kenny’s analysis and just want to re-emphasis the point that Moneybox fees took away virtually all your actual investment gains, which were 9.73%, reduced to 3.5% by the fees.
Though whatever “Moneybox+ rewards” is more than made up for that loss, so for now it ended up doing well.
Without special rewards and the LISA bonus, fees matter a lot, which is why platforms like Freetrade are so valuable to the small investor.

As for a discussion of asset allocation, what is appropriate depends entirely on you. How old are you? What are your goals and needs for money over time? How long do you plan to stay invested? What’s your appetite for risk?

Though again, as kenny suggests, it’s largely irrelevant at this stage. Investing in anything “safe” like a broad index tracker will do you fine.

3 Likes
#4

Thanks both.

And thanks @sendu for running numbers, the Moneybox+ was buying products or services through their partners to earn rewards into your account.

So I actually had to spend in order to get it; though it was something I was using at the time anyway (food box delivery)

I can see how flat fees is ideal on large amounts, but I think Moneybox charges both a flat fee and a percentage so yes the only plus side is largely from all the additional gains via gov scheme and +

I guess I shall just leave it alone and wait for Freetrade LISA’s to come around and transfer it. I suspect Freetrade it will be just a flat fee? I’ll have to weigh it up at the time to see which costs more on this fairly modest amount in the LISA.

I put most my money into a LISA because I wanted to start working towards my future or the security of it, and withdrawing from a LISA is saying goodbye to large chunks of the earnings in it - so I know I wouldn’t ever touch it. But since beginning this with Moneybox I’ve solidified my stance on investing.

Put money in that would/could otherwise be disposable so that it doesn’t affect lifestyle heavily, then there’s no temptation to withdraw any of it and just let it do its thing. I’m confident about my solidarity to investing now, though, and I just want to add what I know I can afford to let go of in small chunks over time and forget about it.

Which is what I’ll continue to do.

2 Likes
#5

Thinking about it though I will look in my lifestyle where I can perhaps afford to let go of more, or just split the sharing of the money for investing each month across both the Freetrade free investing and a LISA (Moneybox now, Freetrade later) because both have benefits to me.

The fee free of Freetrade let’s me dip into investing without cost to me.
But the LISA works towards the goal of having invested money for retirement (other than pension) or first home and has a very generous gov bonus.

I just didn’t want to keep adding to the Moneybox LISA whilst the fees were quite substantial. But then again I feel like if I don’t keep adding at least a bit to it each month, then I could end up losing money. Maybe even just £5-10 each month with the gov bonus will help soften the blow of the fees.

(#18 414) #6

You can vote for LISA in the link below

3 Likes
#7

It’s too late for this year, but if Freetrade still don’t offer a LISA next year, consider switching to AJ Bell Youinvest, which is the cheapest LISA platform I could find for my own needs.

1 Like
#8

Oh can they only open their LISA offering at the start of the new financial year? That’s a bummer

#9

Freetrade can offer their LISA when ever they like. You won’t be able to add new money to a new LISA if you already added money to another LISA in the same tax year.

Disclaimer: I’m not actually sure about this point. You can transfer a LISA at any point in time, but I’m not sure where new money is allowed to go. I’m of the belief it can only go to the same place as prior contributions that year. I could be wrong.

#10

I haven’t actually added anything to my LISA for quite some time (Nov 2018 I think) Certainly not this current tax year, so if the Freetrade LISA were to come out in the next few months… I could hang back and just transfer it and start adding to the new pot.

2 Likes
(Zain) #11

Transferring (fully!) a LISA lets you continue contributing to your “new” LISA. Point being it’s not really new if you transferred it. HMRC doesn’t care about the provider, just about the LISA.

2 Likes
#12

Ah that makes sense so can contribute into LISA and transfer it to new provider and keep contributing. They just care about opening multiple of the same kind.

(Zain) #13

Yep, they don’t even mind opening more than one, just about contributing (=paying into it) to more than one in the same tax year.

1 Like
#14

And on that note I’ve sent £10 into it, with £10 each month aside to pay into it also. Every little helps. That £12.50 should help with constant yet small growth and soften the blow of fees a tad.

I think with regular fees, you gotta regularly be contributing. Can’t exactly rely on investment gains to cover the fees, and then you’re just breaking even anyway :man_shrugging: