Having two junior ISAs for my child

Stacey101

Hi,

My son is 10 and we just opened a stocks and shares junior ISA for him- a Vanguard Life strategy fund. However, given that the fund seems to be losing value since we opened it, we want to open a second- more boring but reliable one. Over time, according to past performance, the Vanguard fund should perform well but just to hedge our bets- a second junior ISA - spreading our money between the two seems a good idea.

Looking at MSE's great guide on Junior ISAs we are thinking of the NS&I one with 3.25% atm.

Is this possible? It seems that two junior ISAs of different types are allowed?

Thanks

bowlhead99

You can have one JISA of each type (one stocks & shares JISA and one cash JISA) as long as you don't go over the annual subscription limit in total.

The LifeStrategy one isn't expected to go up smoothly because it has a daily price related to stock market returns. The expectation is that it would go up in value over the long term (before your son wants to access the money), not that it would go up in value this week or next week or next month etc.

If it has 'lost value', that simply means the share price is lower than it was when you put the money in, and if it continues to go down in price for a while, that's great, because when you next put money into it you will get more shares for your money.

Stacey101

Thanks so much for that advice. Very good to know. I never used Vanguard before so was a bit worried when I put 500 pounds in only for it to lose 5 pounds almost immediately:) In it for at least 8 years so should be fine.

AnotherJoe

If you are paying money in regularly then it's in his interest for prices to be low at present. Because it means you are buying them cheaper so that when they do go up he'll have even more growth. It's counterintuitive but think about it this way.
Let say you buy something regularly in the supermarket that isn't perishable. Perhaps dishwasher tablets. Which over time are getting more expensive. And there's a sale on at the moment. . Do you buy fewer this week because they've gone down in price or do you buy more because they've gone down in price? Bearing in mind you are quite confident that in ten years time they will be double or more the current price. Or will you wait until they've gone up before buying more? No you'd stock up now.
Buying units in vanguard is no different, and there's something else to consider.
Ok yes you are buying units in vanguard. However what underlies them is a selection of literally thousands of companies across the world. So fundamentally you are buying a share of the world economy. So don't think too much about it being "vanguard" it's really the economy.
So continue to drip feed and leave them alone.

eskbanker

Stacey101 wrote: »

I never used Vanguard before so was a bit worried when I put 500 pounds in only for it to lose 5 pounds almost immediately:)

Just to add to the above comments, a 1% drop is absolutely nothing in the context of investment performance, and depending on exactly which VLS product you picked (100, 60 and 20 shown below), you should expect occasional corrections of up to 20-40% over the long term, to go with the typically more steady increases.



Recent years have been generally good through a bull market so it wouldn't be a surprise for more significant falls to happen over the short to medium term, but people have been predicting that for many years!

P.S. Presumably your location shown beside your post (La Rioja, Spain) is inaccurate, as this would have ramifications for ISAs?

DrSyn

It sounds to me as if you are new to investing. So I will make the following points.

SAVINGS: Money is in a safe place & not at risk. You expect to at least take out what you put in.

Money need within 5 years should be kept in a savings account.

The NS&I account is a savings account.

INVESTING: Putting your money at risk. You hope to take out more than you put in, but this is not guaranteed.

The VLS is an investment product not a savings product. It is normal for the price of the fund to go up and down. Over the years it should go up more than it goes down.

Remember the VLS is a global multi asset fund, assets split between shares and bonds. So your son now has the world economy and inflation working for him.

Keep reinvesting the dividends!


Out of interest which share/bond split did you chose for son?

xylophone

of the NS&I one with 3.25% atm.

Coventry BS offers 3.6% on cash JISA.

https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html

Why not pay his gifts for other people into the cash JISA and your regular monthly gift into the stocks and shares JISA?

Remember to stay within the total annual limit.

I have just had a thought - did your son already have a CTF?

Stacey101

DrSyn wrote: »

It sounds to me as if you are new to investing. So I will make the following points.

SAVINGS: Money is in a safe place & not at risk. You expect to at least take out what you put in.

Money need within 5 years should be kept in a savings account.

The NS&I account is a savings account.

INVESTING: Putting your money at risk. You hope to take out more than you put in, but this is not guaranteed.

The VLS is an investment product not a savings product. It is normal for the price of the fund to go up and down. Over the years it should go up more than it goes down.

Remember the VLS is a global multi asset fund, assets split between shares and bonds. So your son now has the world economy and inflation working for him.

Keep reinvesting the dividends!


Out of interest which share/bond split did you chose for son?

I chose the 60/40 Life Strategy fund.

Stacey101

xylophone wrote: »

Coventry BS offers 3.6% on cash JISA.



Why not pay his gifts for other people into the cash JISA and your regular monthly gift into the stocks and shares JISA?

Remember to stay within the total annual limit.

I have just had a thought - did your son already have a CTF?

My son does not have a CTF (I had to look this up!) as he was born in Spain and we only got him the UK passport last year. So, not sure if he has the right to one?

xylophone

So, not sure if he has the right to one?

See under eligibility here

https://en.wikipedia.org/wiki/Child_Trust_Fund

https://www.gov.uk/child-trust-funds