Help with JISA

BadgerTwin

Hi,

I'm a bit late to the party but am setting up junior ISAs for my children. I don't have much experience investing and would value help on constructing a strategy for them to take forward. My timeframe is 5-7 years. I was thinking about dividing/allocating the investment allowance as follows - would love to hear thoughts on this and whether there's a better and simpler line to take. As I've left it late and as they could continue to invest after leaving home, I think I'd prefer a more adventurous than cautious approach.

• 20% UK equities including FTSE 100 and FTSE 250 high dividends
• 20% world / tracker (SWDA or similar, HSBC All-World Index, Abrdn Global Smaller Companies)
• 10% each US / Europe / Asia (inc Japan/China) / EM
• 10% multi-asset fund / gold
• 10% specialist inc infrastructure, healthcare, REITs

I'm assuming accumulation is better than distribution at this stage. I am hoping to manage and rebalance where necessary. Trying to keep costs low and avoid duplication. 

Thanks in advance for any suggestions and would be grateful if you see any major bloopers here.

MX5huggy

That all seems so over complicated. Just buy a cheap Global tracker and be done with it, it might beat this plan it might not but it will be easier. With a lot less trades so probably cheaper. 

Presume you have found fidelity as a platform that does not charge platform fees for JISA’s. 

My JISA’s have just Vanguard 

ESG Developed World All Cap Equity Index Fund (UK) - Accumulation

In them, it a bit expensive compared with a developed world tracker but I’m happy to pay a little to remove some nasty stuff (I realise ESG is a compromise). 

eskbanker

BadgerTwin said:

My timeframe is 5-7 years.

Going 100% equities would be a fairly aggressive strategy for this sort of timeframe, which is short term by investment standards, so other asset classes such as bonds, potentially just within a single multi-asset product rather than a DIY portfolio, might be more appropriate....

BadgerTwin

Thanks - I guess it does look a bit complicated.  II also does free JISAs if you have other products with them.

Any recommends for a single multi-asset product?

eskbanker

BadgerTwin said:

Any recommends for a single multi-asset product?

https://monevator.com/passive-fund-of-funds-the-rivals/ has a summary of the main players.

Tucosalamanca

With this sort of timeframe, I might be more inclined to stay in cash.

How much more are you expecting to achieve by investing? I guess 8-10% is possible but it's far from guaranteed.

4% with no risk and no fees doesn't seem unattractive to me.

Perhaps it depends on future plans?

Will the funds be needed at 18yrs old, or will they roll over into an adult ISA to continue growing?
That would probably be the deciding factor for me.

BadgerTwin

Thanks for these ideas, much appreciated.

I'm hoping to educate them and that they will continue to invest and grow the funds, hence wanting to set it up well for them now. Funds won't be needed at 18 unless there's an emergency.

I've always stuck in cash but feel investing would be a better route for them longer term. Maybe I'll try some of both.

Thanks again.



 

Albermarle

BadgerTwin said:

Hi,

I'm a bit late to the party but am setting up junior ISAs for my children. I don't have much experience investing and would value help on constructing a strategy for them to take forward. My timeframe is 5-7 years. I was thinking about dividing/allocating the investment allowance as follows - would love to hear thoughts on this and whether there's a better and simpler line to take. As I've left it late and as they could continue to invest after leaving home, I think I'd prefer a more adventurous than cautious approach.

• 20% UK equities including FTSE 100 and FTSE 250 high dividends
• 20% world / tracker (SWDA or similar, HSBC All-World Index, Abrdn Global Smaller Companies)
• 10% each US / Europe / Asia (inc Japan/China) / EM
• 10% multi-asset fund / gold
• 10% specialist inc infrastructure, healthcare, REITs

I'm assuming accumulation is better than distribution at this stage. I am hoping to manage and rebalance where necessary. Trying to keep costs low and avoid duplication. 

Thanks in advance for any suggestions and would be grateful if you see any major bloopers here.

 I agree that a single multi asset fund ( at the more adventurous end probably) would suffice.
However just to make a general point about the above portfolio in that it is very low on US equity.
There is plenty of debate to be had about the 'correct' % of US equity in a portfolio, but I think there would be a consensus from most that about 20% is really too low. 

ispookie666

Investment decisions as above.  
If you are looking for a platform, Fidelity do not charge fees for their JISA unlike HL, Vanguard etc.. But, you will still have fund charges.  This will work out as roughly 0.25-0.45% per annum

cloud_dog

With the timeframe in mind, and accepting that you have no control over the money at age 18 (16 in Scotland), you could do a bit of both.

A child can have both a cash and S&S JISA.

For ours we monitored their attitude to money and timeliness of the gratification of money, anyway we ended up with a Fidelity S&S JISA invested simply in Fidelity Index World, and an amount in the cash JISA.

We discussed the pots with ours and offered our opinions on usage (plans, goals etc), and they agreed.  So, the S&S remained invested for longer term stuff / post University etc, and the cash JISA could be pithed up against the wall, if that was their choice.

Where I am meandering with this, is that the 5 to 7 years could be a lot longer, 8 to 12 and if you were to follow that path, assuming you are comfortable with 100% equities then I think that is not an unreasonable option.

Just to say we prioritised the S&S contributions and it was probably only from age 15ish that we topped up the cash JISA.

Food for thought.

BadgerTwin

Thanks cloud_dog, that is very helpful.