Junior ISA

Zorillo

Hello,

My son is fast approaching his first birthday, and being a much better saver than his dad, has already amassed nearly £1k in his own name.

He can reasonably expect to save a similar amount every year.

I would like to invest this money for him, hoping that it will increase in value sufficiently to help him with a major purchase when he's older.

It is unlikely that in most years he will get particularly close to the limit for investing in a Junior ISA, although there may be windfalls along the way. Rather than dripfeeding small amounts, I am proposing to annually contribute an amount close to £1000 (or more) into a Stocks and Shares Junior ISA and invest that in a global equities tracker fund or similar.

I see the HSBC Global fund is talked about as cheap and cheerful, and the Vanguard lifestyle funds would also seem to be contenders.

Can anyone please me any advice on which platform I should base the JISA in order to maximise the limited investment and minimise costs based on the proposed annual deposits, and if any funds are particularly suitable for what I'm aiming to achieve.

Thanks in advance.

xylophone

https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-junior-isa might suit.

ValiantSon

The cheapest way of investing in HSBC Global Strategy would be through Charles Stanley Direct, who charge 0.25% platform fee on top of the OCF for the fund (depending upon which version of the fund you chose this would be 0.17% - Cautious; 0.19% - Balanced; 0.20% - Dynamic; 0.21% - Adventurous). Total cost = 0.42% - 0.46%. https://www.charles-stanley-direct.co.uk/Our_Services/JISA/

The cheapest way to invest in the LifeStrategy funds would be directly through Vanguard, who will charge 0.15% platform fee and 0.22% OCF for any version of the fund. Total cost = 0.37%. https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-junior-isa

You might want to have a look at the funds on TrustNet to get a sense of them:

HSBC Cautious https://www.trustnet.com/factsheets/o/g1hf/hsbc-global-strategy-cautious-portfolio-c-acc

HSBC Balanced https://www.trustnet.com/factsheets/o/g1hd/hsbc-global-strategy-balanced-portfolio-c-acc

HSBC Dynamic https://www.trustnet.com/factsheets/o/g1hh/hsbc-global-strategy-dynamic-portfolio-c-acc

HSBC Adventurous https://www.trustnet.com/factsheets/o/o2qd/hsbc-global-strategy-adventurous-portfolio-c-acc

Vanguard LifeStrategy 20 https://www.trustnet.com/factsheets/o/acdm/vanguard-lifestrategy-20-equity-a-gross-acc-gbp

Vanguard LifeStrategy 40 https://www.trustnet.com/factsheets/o/acdo/vanguard-lifestrategy-40-equity-a-acc

Vanguard LifeStrategy 60 https://www.trustnet.com/factsheets/o/acdq/vanguard-lifestrategy-60-equity-a-acc

Vanguard LifeStrategy 80 https://www.trustnet.com/factsheets/o/acdt/vanguard-lifestrategy-80-equity-a

Vanguard LifeStrategy 100 https://www.trustnet.com/factsheets/o/acdv/vanguard-lifestrategy-100-equity-a-acc

Given your son's age and the length of time that you are likely to be investing over then I wouldn't bother with funds that have a high proportion of bonds in them. HSBC Dynamic and Adventurous, or Vanguard LifeStrategy 80 and 100 might be more where you want to look, but be aware that these are high risk investments, so you could see very significant falls at certain points during that timeframe. Should you stay invested, however, through significant market downturns, then it is likely that over the next 20 years or so the gains will be significant. Personally I'd pick either HSBC Dynamic or Vanguard LifeStrategy 80, but that is just a personal view and the choice must be your own.

N.B. Be aware that both HSBC Cautious and Adventurous have only recently launched and there is no meaningful performance data.

Zorillo

Thank you for that very informative reply ValiantSon.

The first windfall has occurred sooner than anticipated, he is going to inherit a bit of money so he might tip £4k this side of April after all.

Higher risk is what I'm aiming for, this money will stay invested at least until he's 18 and if we do a good job of raising a sensible person, hopefully a good while longer.

Thanks again.

ValiantSon

Zorillo wrote: »

Thank you for that very informative reply ValiantSon.

The first windfall has occurred sooner than anticipated, he is going to inherit a bit of money so he might tip £4k this side of April after all.

Higher risk is what I'm aiming for, this money will stay invested at least until he's 18 and if we do a good job of raising a sensible person, hopefully a good while longer.

Thanks again.

Glad to provide what little help I can.

Best wishes with the investment and with bringing up a financially astute son!

cloud_dog

Zorillo wrote: »

Higher risk is what I'm aiming for, this money will stay invested at least until he's 18 and if we do a good job of raising a sensible person, hopefully a good while longer.

No disrepect to you as parents but, what if he isn't?

Zorillo

That's a fair question and one I've thought hard about, but this is already his money and I'm just hoping to do the best I can for him. After that...

I have considered investing it in my name but I think it will lose some of its educational value if I do that. And it's his.

Alexland

Zorillo wrote: »

Higher risk is what I'm aiming for, this money will stay invested at least until he's 18 and if we do a good job of raising a sensible person, hopefully a good while longer.

Have you considered Orbis? They are contrarian investors and have outperformed the MSCI World index since 1990 by an average of 4% per year? The performance fee isn't cheap but they earn it in enhanced returns. Not too late to get a free £100 in the Junior ISA if you act quickly. See my thread below:

https://forums.moneysavingexpert.com/discussion/5775047

Alex

greenglide

he is going to inherit a bit of money so he might tip £4k this side of April after all.

Well it sounds as if £4k is his anyway?

Zorillo

greenglide wrote: »

Well it sounds as if £4k is his anyway?

I'm not sure I understand. But yes, if he gets what his grandad suggested today (dependant on a property sale completing before April), he'll have around that amount to his name.

planteria

i have a boy 14months old, and a 6week old too.. both have JISAs set up that family members/friends can pay into directly online. they are invested in a Friendly Society With Profits Fund.