Junior Stocks and Shares ISA - Are they still worth it? HELP

kuratowski

I think with a tiny bit of guidance, you can manage it for yourself.  Looking back at Xylophone's comment, "A multi asset index fund might well suit your purpose".

These multi-asset funds work as a "one stop shop": they are each a diversified portfolio in their own right, so you just need to invest in one single fund.  They each come in a number of risk levels which reflects the proportion of equities they hold.  The more equities, the more risk but also the more potential growth.  (At least, that's what we hope, there are no guarantees.)

Looking at one of the links from Xylophone's post, you will find mention of some well-known multi asset fund series, i.e. BlackRock Consensus, HSBC Global Strategy, LGIM Multi-Index and Vanguard LifeStrategy.  The costs are not quite all the same but very similar.  The comparison article shows that HSBC is the lowest cost.

As you have noticed, Fidelity is a really good value platform for Junior ISAs.  Searching on the Fidelity Investment Finder under funds for "HSBC Global Strategy" yields the five funds in the series:

1) HSBC Global Strategy Conservative Portfolio AC

2) HSBC Global Strategy Cautious Portfolio Accumulation C

3) HSBC Global Strategy Balanced Portfolio Accumulation C

4) HSBC Global Strategy Dynamic Portfolio Accumulation C

5) HSBC Global Strategy Adventurous Portfolio AC

I have listed these in order of increasing risk, that is Option 1 is the least risky and Option 5 is the most risky.

We cannot tell you which fund to pick.  It depends on how much risk you are willing to take - how upset will you be by seeing the ups and downs when the fund value oscillates with the stock market.  However, for a 1 year old child, investing with at least a 17 year time horizon, you probably do not want to be too cautious because it will really limit the growth potential.  So risk levels 3, 4, 5 may be more suitable than 1 or 2.

Nurse2047

Have you looked at 
https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products

I opted for this for my children as I found it easier to understand
This video may help
https://youtu.be/lGQ9KyQq8Jw

gobeye

Open your JISA with Fidelity as they have zero platform fees. All in on Vanguard Global All Cap Fund Acc at 0.23% OCF, job done. All sorted for very low fees and no need to mess around with multiple funds.

kimbowo

kuratowski said:

I think with a tiny bit of guidance, you can manage it for yourself.  Looking back at Xylophone's comment, "A multi asset index fund might well suit your purpose".

These multi-asset funds work as a "one stop shop": they are each a diversified portfolio in their own right, so you just need to invest in one single fund.  They each come in a number of risk levels which reflects the proportion of equities they hold.  The more equities, the more risk but also the more potential growth.  (At least, that's what we hope, there are no guarantees.)

Looking at one of the links from Xylophone's post, you will find mention of some well-known multi asset fund series, i.e. BlackRock Consensus, HSBC Global Strategy, LGIM Multi-Index and Vanguard LifeStrategy.  The costs are not quite all the same but very similar.  The comparison article shows that HSBC is the lowest cost.

As you have noticed, Fidelity is a really good value platform for Junior ISAs.  Searching on the Fidelity Investment Finder under funds for "HSBC Global Strategy" yields the five funds in the series:

1) HSBC Global Strategy Conservative Portfolio AC

2) HSBC Global Strategy Cautious Portfolio Accumulation C

3) HSBC Global Strategy Balanced Portfolio Accumulation C

4) HSBC Global Strategy Dynamic Portfolio Accumulation C

5) HSBC Global Strategy Adventurous Portfolio AC

I have listed these in order of increasing risk, that is Option 1 is the least risky and Option 5 is the most risky.

We cannot tell you which fund to pick.  It depends on how much risk you are willing to take - how upset will you be by seeing the ups and downs when the fund value oscillates with the stock market.  However, for a 1 year old child, investing with at least a 17 year time horizon, you probably do not want to be too cautious because it will really limit the growth potential.  So risk levels 3, 4, 5 may be more suitable than 1 or 2.

Thanks for this - One question, if I invest in one of those, do I just leave it for 17 years or do I need to check in regularly for better funds on offer and move my savings across? 
I assume if I pick a risky fund I would be looking to move to something a little less risky when coming up towards 16-17 years of age?

kuratowski

An investment in a single multi asset fund - like those mentioned above - is a standalone diversified portfolio, which is internally rebalanced as markets move, so in theory it should be ok to leave it alone.  The caveat is over a 17 year time period, new products could come along, and the fee structures could change, so it isn't guaranteed to be best value forever.  It would make sense to keep an occasional eye on it.  There are comparison tables, etc, to which you can refer.

In general, if you are holding a risky fund, it is because you are willing to ride out the ups and downs, it is the long term performance which matters (from the start to the finish).  Derisking nearer the end date is something you can do, certainly, but it probably comes at a perfomance cost.  Also, you need to consider whether it is likely your child will need access to the money to spend immediately at age 18?  If not, then keeping it invested until needed (e.g. for deposit on a property) would be a good idea - in this situation, you would want to avoid derisking too early.

kimbowo

One final question - If I am to add £50/£100 to the account each month, will a fund still be the most sensible option as it looks like I would be charged 'buying fees' each time. Does it still make it viable in that case?

kimbowo

It states: 

• £1.50 for deals as part of a regular savings or withdrawal plan, or for a reinvestment of income or a dividend.
• Simple charge of £10.00 for each deal placed online

If £11.50 are deducted each time I add £50 it seems even if I make 3.5% I am losing money in the end. 

kuratowski

Those dealing fees are for shares, ITs and ETFs.  For funds, Fidelity don't apply dealing charges.  
Look for the heading "Our straightforward dealing fees" on this page https://www.fidelity.co.uk/services/charges-fees/#tab-link

kimbowo

Perfect, thanks. I think I will go for it  

kimbowo

Out of interest - what exactly is the difference between HSBC Global Strategy Fund c Accumulation and Income?