Invest in one fund or multiple funds?

Misd_sixties22

Hi
After some advice please. I have opened two investment JISAs for my two daughters. They both have different amounts in there as cash and thus far I have invested £1000 from one account and £750 from the other account into the same fund - Fidelity's Multi Asset Allocator Growth Fund (balanced risk).

My next question is that obviously I will leave some money as cash but should I invest the rest in the same fund or spread it across different funds?  

Does this also apply to my LISA - Should I spread my money across 2-3 funds with different risks or stick it all in the same one?
Thank you in advance.

masonic

As you have opted for a multi-asset fund, and a balanced risk option, the investment will already be highly diversified, so there would be no need to spread money any further unless you had specific things you wished to gain exposure to. Such funds are designed to be a stand-alone option to keep things simple.

In the years leading up to the money being needed, it may make sense to revisit and switch some or all into lower risk ahead of cashing in. If money is to be taken out gradually, as it might be for e LISA used in retirement, then holding a separate low risk and higher risk fund would allow you to avoid drawing down on higher risk investments after they have fallen, as you can instead start to deplete the low risk assets and rebalance when markets recover. This is not something that needs to be considered now if the money will stay invested for the long term.

Misd_sixties22

Thank you for making that so clear.  Glad that it's nice and simple too!

Albermarle

My next question is that obviously I will leave some money as cash

Why ? In these investment accounts cash normally earns zero interest . If you want cash savings then a cash savings account is better .

A JISA is an investment account , so invest it !

Misd_sixties22

Albermarle said:

My next question is that obviously I will leave some money as cash

Why ? In these investment accounts cash normally earns zero interest . If you want cash savings then a cash savings account is better .

A JISA is an investment account , so invest it !

I thought I had to leave some money in to pay for the fees?!

Alexland

Misd_sixties22 said:

I thought I had to leave some money in to pay for the fees?!

Which platform are you using? If the JISAs are with Fidelity there are no ongoing charges so you can just invest all the money. The fund management charges will be deducted from inside the fund rather than the account.

Misd_sixties22

Alexland said:

Misd_sixties22 said:

I thought I had to leave some money in to pay for the fees?!

Which platform are you using? If the JISAs are with Fidelity there are no ongoing charges so you can just invest all the money. The fund management charges will be deducted from inside the fund rather than the account.

I'm using Fidelity and AJ Bell.  AJ Bell did give me the option to take fees from the investment so I guess I don't need to keep anything in there! Thanks.

Albermarle

Most of these platforms will sell your investments to pay fees , if no cash available . However normally AJ Bell charge £10 for doing this , so may well do the same with a JISA. You need to check !
Easier with Fidelity as no fees and even if there was they do not charge for selling investments to pay fees.

Alexland

I don't see why you would want to use AJ Bell for a Junior ISA when Fidelity are offering to operate child accounts for no ongoing charge if you stick with funds. Have you considered asking Fidelity to transfer the AJ Bell account across?

Albermarle said:

Most of these platforms will sell your investments to pay fees , if no cash available . However normally AJ Bell charge £10 for doing this , so may well do the same with a JISA. You need to check !

Yes AJ Bell even charge the £9.95 for disinvestment to pay charges on child accounts and hide it making you click to expand the "Transfer out and other chages" section. I'm happy with AJ Bell for our LISAs but on JISAs there are better options and so our kids are with Fidelity.

https://www.youinvest.co.uk/investing-for-children/charges-and-rates