Investing in funds - HL, AB Bell or Wahed?

Investment Questions and Chats General Investment
#1

Salaam,

I am looking to start investing in funds, and was wondering if anyone could share their experiences please.

I am hoping to buy my first house within 12 months in sha Allah, so wouldn’t want to open a LISA, as my understanding is that you need to have held it for at least a year to access for a first house purchase without the penalty. Is that correct?

I don’t want to invest too much to begin with as I want as much for my deposit as possible, so maybe £1-2k, and I plan to invest £100 or so per month. I am looking for long term growth, and would hope to not touch it for 15 years plus, as I’m only in my early 30s.

I have seen a few different funds I am interested in across the various platforms.

The one I’m most interested in is the HSBC Islamic Global Equity Index, which I could invest in with HL or AJ Bell. There’s also the Aberdeen Islamic Global Equity Fund with AJ Bell only. I am looking at funds for the diversification, so do you think I would be better off going with AJ Bell to have two funds, or do you think I would have more long term growth with just the HSBC?

As I’m planning to do monthly deposits, I am a little concerned at the £1.50 fee with AJ Bell, as that will add up over time and reduce the buying power of my £100 each month, or is it worth it to have the extra diversification?

The other option I am considering is going with Wahed Invest. Depending on how aggressive I am with their portfolios, it will also invest in EFTs and Sukuk funds, as well as the HSBC fund. The EFTs are iShares MCSI World and also Emerging Markets. Again, would you say having the diversity of the EFTs and Sukuks make this more attractive?

I believe those EFTs are also available on the other platforms, but because I think they charge nearly £10 per deal, it wouldn’t be worthwhile for me to invest £100 a month.

Any comments/advice/experiences you’ve had with these funds or platforms would be greatly appreciated.

Jazakallah

#2

Wa alaykum salaam

Welcome to the community!

Have you heard of Freetrade? It’s an app-based shares/fund provider, and there are no trading fees. They are regulated by the FCA and so are secure too. I have checked and they include MSCI World Islamic and MSCI USA Islamic as part of their options.

Hope this helps you in saving on dealing fees- it was a gamechanger for me! (I used to deal with HL and spent quite a bit on dealing fees!). You still pay stamp duty as usual. The Freetrade model works by offering optional premium services with monthly fees (such as ISAs, SIPPs, and a Plus account which opens you up to investing in a wider range of shares/funds). The basic account is completely free though. I have been with Freetrade for over a year and can attest that their app is very good and their customer service is responsive and friendly. They also add new companies very regularly.

JzkAllahkher
Nawaaz

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#3

Thanks for the recommendation brother.

I’ll check them out.

Are you able to make monthly deposits across your portfolio by Direct Debit or Standing Order?

#4

You’re welcome :slight_smile:

Yes you can make direct debits/standing orders into your Freetrade account. However, the cash deposited is not automatically invested into the funds/shares (they are deposited as cash), so you need to take that final step yourself. The trades are instant during market opening hours, so this doesn’t pose much of a problem.

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#5

5
AJ bells seem to have the complete variety of Islamic funds available and their platform charge is cheapest among Islamic options. The two popular options are HSBC fund and Ishares MSCI - a discussion around these can be found here Selecting an ETF

On your 15 plus year horizon, maybe 80-90% in HSBC and 20-10% in the MSCI Emerging market to get more exposure in China…