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  • FIRST POST
    • luke222010
    • By luke222010 13th Oct 16, 11:27 AM
    • 69Posts
    • 3Thanks
    luke222010
    Are these suitable funds for a JISA?
    • #1
    • 13th Oct 16, 11:27 AM
    Are these suitable funds for a JISA? 13th Oct 16 at 11:27 AM
    Hi,

    Been asking questions around JISA's for the last couple of months, with a view to investing in a fund (or collection of funds) for my 5 month old boy.

    I was originally looking at the Vanguard Lifestrategy 60% Acc. fund.

    But having signed up with HL and placed some money on account ready to invest, I am now looking around other funds using their research and fund details.

    I was looking at the CF Woodford Equity Income fund, as well as the Fundsmith Equity fund.

    Can anyone who knows a lot more about this than me advise whether these are appropriate choices for a JISA?

    Cheers,
    L.
Page 1
    • Linton
    • By Linton 13th Oct 16, 11:52 AM
    • 6,940 Posts
    • 6,535 Thanks
    Linton
    • #2
    • 13th Oct 16, 11:52 AM
    • #2
    • 13th Oct 16, 11:52 AM
    As you are just starting with the JISA I suggest you keep to a single fund. Any benefits of multiple funds would be comparatively small, most of the increase in JISA value coming from new contributions. Only once the JISA has grown to say £10K it may be worthwhile looking at extra funds.

    Of the funds listed the most appropriate would seem to be the Vanguard 60% fund which invests in a very wide range of both bonds and shares from across the world. The other two funds are much more focussed. There are alternatives to the Vanguard fund which may provide an even wider spread of underlying investments but for your purposes I would consider the Vanguard 60% fund perfectly OK.
    • jimjames
    • By jimjames 13th Oct 16, 12:11 PM
    • 10,841 Posts
    • 8,910 Thanks
    jimjames
    • #3
    • 13th Oct 16, 12:11 PM
    • #3
    • 13th Oct 16, 12:11 PM
    If you're looking at those two funds instead of the VLS60, why would you not use the VLS100 as that's 100% equity just like the other 2 funds? For a young child then I can't see a problem with 100% equity but I'd be prepared for that risk.
    Last edited by jimjames; 13-10-2016 at 12:14 PM.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • luke222010
    • By luke222010 13th Oct 16, 12:16 PM
    • 69 Posts
    • 3 Thanks
    luke222010
    • #4
    • 13th Oct 16, 12:16 PM
    • #4
    • 13th Oct 16, 12:16 PM
    If you're looking at those two funds instead of the VLS60, why would you not use the VLS100 as that's 100% equity just like the other 2 funds?
    Originally posted by jimjames
    I was actually just this minute looking at the 100% equity fund.
    Originally looked at the 60% fund because of the medium instead of high risk.

    I think i'll stick with the 60% fund for the JISA, and perhaps look at opening my own ISA with a higher risk fund instead.

    Cheers,
    L.
    • badger09
    • By badger09 13th Oct 16, 1:35 PM
    • 4,266 Posts
    • 3,480 Thanks
    badger09
    • #5
    • 13th Oct 16, 1:35 PM
    • #5
    • 13th Oct 16, 1:35 PM
    I was actually just this minute looking at the 100% equity fund.
    Originally looked at the 60% fund because of the medium instead of high risk.

    I think i'll stick with the 60% fund for the JISA, and perhaps look at opening my own ISA with a higher risk fund instead.

    Cheers,
    L.
    Originally posted by luke222010
    That seems the wrong way round to me

    Your son's JISA has 18 years in which to weather the stockmarket ups and downs, and is limited by the amount you can subscribe.

    I don't know how long you intend to be saving into your S&S ISA, or what you are saving for, but you can subscribe £15240 this year and £20k per annum from next year. So potentially, a much larger sum, over a shorter period?

    Wouldn't it make more sense to take a bigger risk with your son's JISA and go for the 100% VLS or something similar, and a lower risk for yours?
    • luke222010
    • By luke222010 14th Oct 16, 9:06 AM
    • 69 Posts
    • 3 Thanks
    luke222010
    • #6
    • 14th Oct 16, 9:06 AM
    • #6
    • 14th Oct 16, 9:06 AM
    That seems the wrong way round to me

    Your son's JISA has 18 years in which to weather the stockmarket ups and downs, and is limited by the amount you can subscribe.

    I don't know how long you intend to be saving into your S&S ISA, or what you are saving for, but you can subscribe £15240 this year and £20k per annum from next year. So potentially, a much larger sum, over a shorter period?

    Wouldn't it make more sense to take a bigger risk with your son's JISA and go for the 100% VLS or something similar, and a lower risk for yours?
    Originally posted by badger09
    Appreciate the advice!
    Like with my Sons, I was intending to put a small amount each month into a fund, with an initial sum of £300 going into it.
    It was actually a toss up between opening my own ISA or putting that money into overpayments on the mortgage. The latter seems the sensible option, and then maybe an ISA will be an option at a later date
    • Waldorf Statler
    • By Waldorf Statler 14th Oct 16, 9:59 AM
    • 65 Posts
    • 61 Thanks
    Waldorf Statler
    • #7
    • 14th Oct 16, 9:59 AM
    • #7
    • 14th Oct 16, 9:59 AM
    Your thoughts seem a bit convoluted, intending no offence. are you investing for you, investing for your child or paying down a mortgage? they are all very different.

    I would echo badger09's comments and have greater risk in the JISA as (presuming it's for a newborn) you've got a minimum 18 year horizon. I opened JISAs for both my two when they were born and have invested solely in VLS 100% for both of them. No fuss.

    If you are investing in your own ISA then you need to ask yourself what it's for and for how long.

    If you pay down the mortgage then (aside from the psychological benefit of having a smaller mortgage) it depends what your interest rate is and whether you might reach a better LTV threshold in the future to access a cheaper interest rate. But if you only pay ~2% in interest then can beat that in equities from dividend returns alone, let alone any longer term growth.
    • luke222010
    • By luke222010 14th Oct 16, 12:44 PM
    • 69 Posts
    • 3 Thanks
    luke222010
    • #8
    • 14th Oct 16, 12:44 PM
    • #8
    • 14th Oct 16, 12:44 PM
    Your thoughts seem a bit convoluted, intending no offence. are you investing for you, investing for your child or paying down a mortgage? they are all very different.

    I would echo badger09's comments and have greater risk in the JISA as (presuming it's for a newborn) you've got a minimum 18 year horizon. I opened JISAs for both my two when they were born and have invested solely in VLS 100% for both of them. No fuss.

    If you are investing in your own ISA then you need to ask yourself what it's for and for how long.

    If you pay down the mortgage then (aside from the psychological benefit of having a smaller mortgage) it depends what your interest rate is and whether you might reach a better LTV threshold in the future to access a cheaper interest rate. But if you only pay ~2% in interest then can beat that in equities from dividend returns alone, let alone any longer term growth.
    Originally posted by Waldorf Statler
    As mentioned in the OP - I am investing for my childs future. Hence the original question around a JISA.
    Thoughts around my own ISA & overpaying on the mortgage are other things I have been considering doing, but without certainty unlike the JISA.
    That said, I think paying off the mortgage with our current fixed interest rate offers more benefits than putting £100 into an ISA of my own each month, so will go down that route in the next 12 months.
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