Monthly Child ISA savings Class (A Front loaded, B Back End loaded, C Level Loaded) Accumulation

jtonky

Hello all I have tried searching for this question but I could not find an answer. I have two children with kids ISA's which I contribute monthly too and I am trying to work out what class is right for no upfront investment and just a monthly for the next 18 years. I went for a FTSE 100 tracker class C Accumulation which has done well over the past 12 months. A friend of Mine went for a Class Acculmation and I cant directly compare as the FTSE 100 tracker I invested in only offered Class C, but his FTSE 100 tracker had both  A and C.

As an example, I found the "MI CHARLES STANLEY MONTHLY HIGH INCOME" fund as an example offers Class A and C on the same fund and looking at the charges the Class C ended up 22% up over 5 years where as the Class A was 20% up. Now this is an example and it depends on your exit point I know but in principle Class A you pay a fee up front at the start and then that's it other than your annual management fee, Class C is level loaded apparently meaning you have no up front fee and then you have a low back end fee.

So what is my question?
If you contribute £50-£100 per month into an ISA which you don't plan to touch for 20 years is it better to invest in Class A as there is no additional fee when you come to exit as we hope by then it will be worth more than what we put into it.

Your view
What is your opinion, what do you do as I see the merits in both! plus all funds are not created equally in that some funds only offer Class C and they may do double-digit better than a similar fund that offers both Class A & C. Any opinions welcome!

eskbanker

The debate about classes should be secondary to choosing sensible investments in the first place - why would you only invest in one market (and not a particularly good one) rather than diversifying?  Neither a FTSE 100 tracker (on its own) nor a high income fund would seem appropriate for a JISA that would typically be oriented towards growth....

kidmugsy

Do messrs Vanguard do JISAs?  If so you may find that they offer an attractive combination of low charges and a cheap global equity tracker.

MX5huggy

kidmugsy said:

Do messrs Vanguard do JISAs?  If so you may find that they offer an attractive combination of low charges and a cheap global equity tracker.

Yes but their funds are cheaper to hold with Fidelity because Fidelity don’t have a platform fee for JISA’s  (loss leader for them, suck them in young then keep them for 70 Years).  Although there are trading fees.

dunstonh

 I went for a FTSE 100 tracker class

Ouch. That is not good investing.   100% going into UK equity large cap.     A market that is poorly diversified in mostly 19th-century businesses.   It seems a strange Active management decision to use that fund.

If you contribute £50-£100 per month into an ISA which you don't plan to touch for 20 years is it better to invest in Class A as there is no additional fee when you come to exit as we hope by then it will be worth more than what we put into it.

The class codes vary with different fund houses.   Basically, you should look for the clean share class (no charge going in, no charge coming out).  Some platforms may have a super clean version (slightly lower charges than the clean version).

cloud_dog

MX5huggy said:

kidmugsy said:

Do messrs Vanguard do JISAs?  If so you may find that they offer an attractive combination of low charges and a cheap global equity tracker.

Yes but their funds are cheaper to hold with Fidelity because Fidelity don’t have a platform fee for JISA’s  (loss leader for them, suck them in young then keep them for 70 Years).  Although there are trading fees.

Not on OEICs/funds.

MX5huggy

cloud_dog said:

MX5huggy said:

kidmugsy said:

Do messrs Vanguard do JISAs?  If so you may find that they offer an attractive combination of low charges and a cheap global equity tracker.

Yes but their funds are cheaper to hold with Fidelity because Fidelity don’t have a platform fee for JISA’s  (loss leader for them, suck them in young then keep them for 70 Years).  Although there are trading fees.

Not on OEICs/funds.

ETF’s ?  

cloud_dog

Yes, for listed stocks.