Orbis JISA

Workerbee999

My sons JISA is with Orbis. When I transferred it there last year Orbis appeared to be performing well in the rankings (and seemed attractive with fee free) but this year it has bombed (around -8) and is at the bottom of the tables when funds like Lindsell Train are at the top with double digit growth.

Would it make sense to transfer it into a fund like that or is that the worst thing to do (selling low / buying high?). It feels harder to make choices when it is on behalf of someone else....

Any views appreciated

Alexland

My son's JISA is also with Orbis and the fee-free units are particularly volatile as the normal performance fee & refund mechanism gives a bit of stability. I saw strong growth in the first year but the second year has taken it back down again.

Over the long term their investment style has outperformed the index but there are no guarantees. You are essentially taking higher risk in the hope of achieving above average return.

Alex

Workerbee999

Thanks Alex

Are you happy to continue leaving your son’s there? My son is 14 so there are a few years to go yet, and even when it becomes his to manage I hope he will continue to invest towards a house deposit (although I am also fully aware he could withdraw it all and blow it on booze...)

I generally don’t mind taking risks for myself but feel a bit more guilty when making decisions for someone else.

Or maybe I will leave it there but start building up a separate one from this tax year in something like Lindsell Train or a low cost global tracker (if I am allowed to keep the Orbis one going as long as I don’t add any more money?)

Alexland

My son is only tiddly but at 14 then yes it is time to start derisking the money and moving away from equity funds like Orbis or Lindsell Train.

Something like a mixed asset VLS60 fund in a Vanguard Junior ISA or even moving to a cash Junior ISA might be more appropriate if he is likely to spend the money in the next 5-10 years.

A child cannot have two S&S Junior ISA accounts so you would need to transfer the old one if changing providers.

Alex

Workerbee999

Mmmn it feels counter intuitive to “derisk” at the minute as that will crystallise the current loses that I am trying to reduce the risk of....

And if I can’t open a new one for the new tax year without transferring I only have the option of continuing with Orbis funds or selling now while low to transfer.

Or perhaps I could leave it where it is but with all new money going into a cash isa for the next 4 years to dilute the risk, and transfer from Orbis if things recover?

Alexland

Rather than worrying too much about the 8pc drop (which is completely normal with equity fund volatility) the question you should ask is what is the right thing to do going forwards?

Good options include adding more money (to average down the percentage drop), switching to a lower risk fund (in recognition the withdrawal date is approaching), making cash JISA contributions (to lower the overall risk profile across the two JISAs).

Personally my plan is to do nothing for now as I have a much longer investment period until age 18.

Alex

Workerbee999

Thanks Alex, I’ll think it over