Pension for a baby

Murphy_The_Cat

I am in the enormously fortunate position of
a) having a baby, &
b) having enough of a surplus every month to start a pension for my baby.

What sort of mix of funds would people on here recommend that I should be looking for (not actual specific fund names), please.
With it being such a long term investment, I am very happy to look at med-high risk, as well as high risk funds, but I would like a general idea of what other peoples thoughts are regarding fund choice/mix.

as usual, all help would be very much appreciated.

Andy_L

Is a pension the best idea?, from last week:

http://forums.moneysavingexpert.com/showthread.html?t=376958

Murphy_The_Cat

As a long term investment (60-65 years) with tax added back on, with a view towards providing for a retirement in some level of luxury, I can't imagine that it could be licked.

Andy, I looked at the link taht you referred to and it didn't actually tell me anything that I was after knowing - thanks but no thanks.

Does anyone have any suggestions as to the mix of funds that I should be looking for, for a pension for a baby ?

cheers

DavidLaGuardia

Murphy_The_Cat wrote:

As a long term investment (60-65 years) with tax added back on, with a view towards providing for a retirement in some level of luxury, I can't imagine that it could be licked.

Andy, I looked at the link taht you referred to and it didn't actually tell me anything that I was after knowing - thanks but no thanks.

Does anyone have any suggestions as to the mix of funds that I should be looking for, for a pension for a baby ?

cheers

It all depends on the level of Rusk the baby is willing to take.
Feeds may go up as well as down and you may get more or less back than was originally digested.
I suggest before real investment is made that you run a Dummy portfolio as we may be headed for a teddy Bear market.

DavidLaGuardia

Think long term here a good mix of equity and property funds are bound to be more favourable than bonds or cash over such a long term. Emerging market funds worth arguing for (think where places like China and Brazil may be headed). some good global funds are out there if you are not willing to commit your own asset mix. If you want to balance the higher risk of global equities somehat, match it with a UK Equity Income Fund (with a bias on dividend income that can return in flatter markets). The choice of property funds as a thrid area is also growing.

As far as tax breaks are concerned on higher risk alternaticer, you cannot lick VCT and EIS schemes provided the underlying investment is suitable 20% or 30% relief with FULL access to capital, but a Stakeholder will at least keep the capital from being spent!

Murphy_The_Cat

DavidLaGuardia wrote:

It all depends on the level of Rusk the baby is willing to take.
Feeds may go up as well as down and you may get more or less back than was originally digested.
I suggest before real investment is made that you run a Dummy portfolio as we may be headed for a teddy Bear market.

Ahh thanks David

as she is only 4 days old, she is only really interested in a milk run, rusks are for more experienced babies.

feeds are currently going down and through at a steady rate, and we are already achieveing a good return on what has gone in.

We don't want to run a Dummy portfolio as we are concerned that she will end up dependant on something, she is however keen on the idea of a Teddy Bear market, a Doggie market and the little mentioned Dolly market.

Murphy_The_Cat

DavidLaGuardia wrote:

Think long term here a good mix of equity and property funds are bound to be more favourable than bonds or cash over such a long term. Emerging market funds worth arguing for (think where places like China and Brazil may be headed). some good global funds are out there if you are not willing to commit your own asset mix. If you want to balance the higher risk of global equities somehat, match it with a UK Equity Income Fund (with a bias on dividend income that can return in flatter markets). The choice of property funds as a thrid area is also growing.

As far as tax breaks are concerned on higher risk alternaticer, you cannot lick VCT and EIS schemes provided the underlying investment is suitable 20% or 30% relief with FULL access to capital, but a Stakeholder will at least keep the capital from being spent!

David, thank you for your thoughts.
I know a little and I am happy to be educated / led by someone who knows more than me. I wasn't thinking of cash or bonds as an investment as I thought that they would be to safe and that other areas would be more interesting. I also consider that property whilst being a very 'safe' bet is perhaps nearing its peak.
In my own mind, I was considering mabye having 4 funds.
1 in an emerging market.
1 in a UK equities 'aggressive' fund, with a bias towards blue chip, banking and petrochemical companies
1 in a split european & North american fund that invested mostly in smaller companies, &
1 in a 'green' or ethical slanted fund.

i'm happy to monitor the pensions performance and move the funds around on say a every 3 year basis (if needs be)

As regards the VCT & EIS schemes, they don't really do it for me (not that i fully understand them anyway !) as i would like to make sure that her money stays tied up in a long term pension plan.

Does my fund mix idea have any merit ?

DavidLaGuardia

Murphy_The_Cat wrote:

....I also consider that property whilst being a very 'safe' bet is perhaps nearing its peak......
In my own mind, I was considering mabye having 4 funds.
1 in an emerging market.
1 in a UK equities 'aggressive' fund, with a bias towards blue chip, banking and petrochemical companies
1 in a split european & North american fund that invested mostly in smaller companies, &
1 in a 'green' or ethical slanted fund.

i'm happy to monitor the pensions performance and move the funds around on say a every 3 year basis (if needs be)
Does my fund mix idea have any merit ?

Unless we are reaslly going to split hairs here I think your proposal is very good.
(For future consideration, property is not at a peak everywhere a global property fund does not have to invest in an overpriced UK market. Addtionally commercial investment is completely different to the residential market where flat returns are often offset by reliable high rents)

Murphy_The_Cat

DavidLaGuardia wrote:

Unless we are reaslly going to split hairs here I think your proposal is very good.
(For future consideration, property is not at a peak everywhere a global property fund does not have to invest in an overpriced UK market. Addtionally commercial investment is completely different to the residential market where flat returns are often offset by reliable high rents)

David, thank you for your opinion and input - now all I have to do is find a Fund Company that contains well performing funds of all of my selections (& I'll have a closer look at property as well)

:beer:

chesky369

As your baby is only 4 days old I hesitate to say (but I will) that you shouldn't commit too much - remember, you might have more children and you should treat them all the same.

Murphy_The_Cat

chesky369 wrote:

As your baby is only 4 days old I hesitate to say (but I will) that you shouldn't commit too much - remember, you might have more children and you should treat them all the same.

Hi chesky369, this is child #2 (& the last !) and we've already done a pension for MTK1. Of course with it being a stakeholkder pension if we were ever unable to meet the payments we could stop.

The effect of compound interest on such a long term investment is absolutely staggering.