JISAs with Fidelity Performing Poorly. Move it?

Tonski

Hi guys, i'm new to investing and I am looking to open and junior S&S ISA for my daughter. After watching a lot of youtube videos and reading many articles my plan is to open her an ISA with Fidelity and invest in the HSBC FTSE All-World Index Fund Accumulation C as it has low fees and good diversity. Does buying this stock on Fidelity seem like a sensible plan for long term investing? I’m also a little bit confused on the fees with fidelity. I’ve read some articles, such as the money to the masses one, that say there is no charge for buying and selling funds on Fidelity (Sorry I can't post the links as i'm new to the forum).

But on the Fidelity website in the JISA section, it says its “£1.50 for deals as part of a regular savings or withdrawal plan, or for a reinvestment of income or a dividend or simple charge of £7.50 for each deal placed online”.

If I’m investing £100/month to try and take advantage of the dollar cost averaging and compounding, will I be charged a fee each month? If yes, is this still a good way to invest? I know Fidelity don’t have an account fee like someone such as Vanguard do, so which would be the best option?

Alexland

Tonski said:After watching a lot of youtube videos and reading many articles my plan is to open her an ISA with Fidelity and invest in the HSBC FTSE All-World Index Fund Accumulation C as it has low fees and good diversity.

It would have been cleaner to start a new thread as this one is for Misd_sixties22 but anyway...

In terms of 'good diversity' it is all invested in company shares so no bonds, commodities, cash, etc so no diversity by asset class which is fine if you accept that's what you want but worth mentioning for completeness.

As an All-World fund it has the circa 10% exposure to Emerging Markets of which half will be China for which some of us have concerns about the ownership structure of Chinese shares and if the companies are really working in the shareholder's best interests but still 90% of it will be the same as a Developed World tracker such as the cheaper Fidelity Index World which my kids have in their Fidelity JISAs. As the majority of the assets are the same the performance is unlikely to diverge significantly so owning EM exposure is down to personal tastes and there's nothing to say which will do better. I believe there's enough diversification in the Developed World and global markets are increasingly synchronised anyway although I do hold this HSBC fund in a very small account. Every so often I am tempted to move the kids to the Vanguard ESG Developed World fund but at 0.20% that's twice the price of the Fidelity fund for the ESG filtering and it tends to tilt the asset allocation.

Tonski said:

But on the Fidelity website in the JISA section, it says its “£1.50 for deals as part of a regular savings or withdrawal plan, or for a reinvestment of income or a dividend or simple charge of £7.50 for each deal placed online”.

These are charges for buying individual exchange traded shares, ETFs, etc and will not apply to buying traditional OEIC funds such as the HSBC, Fidelity or Vanguard funds mentioned above.

Tonski said:

If I’m investing £100/month to try and take advantage of the dollar cost averaging and compounding, will I be charged a fee each month? If yes, is this still a good way to invest? I know Fidelity don’t have an account fee like someone such as Vanguard do, so which would be the best option?

There are no trade or ongoing platform fees on the Fidelity JISA provided you stick to traditional OEIC funds. The chosen fund manager charges are deducted from within the fund so are for information only so just be aware over the long term they will affect the fund unit prices but they are so low on these funds it's not very material.

It's more important to consider the level of volatility you are happy to see on the investment and if a 100% global tracker fund is right for you and your daughter as they can drop around 50% in a market crash and take years to recover and the uncertainty that it could drop further can be quite alarming the first few times you experience it. If you want a smoother ride consider a multi asset fund from a series such as Vanguard Lifestrategy or HSBC Global Strategy.

Tonski

Thanks a lot for all of the information Alexand, that was really helpful. Apologies if i should have started a new tread, I just didn't want to clog up the message board with multiple threads about Fidelity.

Misd_sixties22

Thank you everyone for your comments. I'll have a good read through this weekend and decide what's best to do. Perhaps I have been a bit naive in my selection!