JUNIOR S&S ISA QUESTION

Nurse2047

I have JISAs with Fidelity and do the same £25pm each child into the Fidelity Index world Acc fund, low fees and fractional shares can be bought. 

cloud_dog

root said:

cloud_dog said:

They are probably more usually called 'funds' (I appreciate funds is really just a generic term for collection in investments).

OEIC / funds can track indexes just as well as ETFs 

A lot of people only become aware of ETFs because they read a lot of information  / guides that originate from the US, where they are more popular than 'mutual funds' (due to different tax treatment over there), but in the UK there are no specific differences in their tax treatment over ETFs.

ETFs have lower fees with some platforms.

Yes, but not relevant here, because HL doesn't apply a platform fee for Junior ISAs.

Albermarle

Nurse2047 said:

I have JISAs with Fidelity and do the same £25pm each child into the Fidelity Index world Acc fund, low fees and fractional shares can be bought. 

When you invest in an OEIC fund like the Fidelity one, you buy units in the fund, not shares. It has always been possible to buy part units of an OEIC fund.
Only when you buy shares ( or other market quoted products like ETF's and Investment Trusts) it can be an issue not being able to buy Fractional shares on some platforms ( but not all) 

j_netprofit

This video seems to agree that ETFs here in the UK cannot be bought fractionally.

(tried to post a youtube link but don't think I can, not enough forum activity to post links yet) However it's a video called 'Index Fund Buyers Guide - ETFs vs Mutual Funds' by Toby Newbatt.

Going back to my S&S H&L JISA the minimum investment for funds is £100 so it looks like there isn't really a quick and easy way around this afterall!

j_netprofit

Nurse2047 said:

I have JISAs with Fidelity and do the same £25pm each child into the Fidelity Index world Acc fund, low fees and fractional shares can be bought. 

On which platform? ISn't there a minimum investment?

ColdIron

jay_ftw said:
This video seems to agree that ETFs here in the UK cannot be bought fractionally.

Definitely not with HL. FYI if you paid in £25 per month to HL for a £74 EFT it would just go into your capital account. If you are thinking it would buy 1 share after 3 months it wouldn't, that's not how HL monthly savings work. You would need to make a manual purchase at £11.95. I wouldn't bother with ETFs and stick to OEICs, Fidelity Index World or HSBC FTSE All World Index would be good and have low costs

Going back to my S&S H&L JISA the minimum investment for funds is £100 so it looks like there isn't really a quick and easy way around this afterall!

Don't worry about the £100 minimum for OEICs/funds. With monthly savings it doesn't apply. £25 will work just fine

• Minimum investment:     £100.00
• Minimum regular savings value:     £25.00

dunstonh

So like the Vanguard 100% Lifestrategy Fund I originally mentioned? My reasoning for not choosing that over an ETF is because the charge is pretty much double.

VLS100 is a managed global equity fund.  Hence why it has higher charges.   A global tracker would likely be more suitable.

My chosen investment will be in the Vanguad FTSE Dev World. 

Why the restriction and not all world?

Exodi

As everyone else has said, this is really a no-brainer.

Just invest in the mutual fund equivalent which allow fractional ownership, no real incentives to favour ETF's over mutual funds in the UK (some platforms charge lower platform fees for holding ETF's but not relevant to junior S&S ISA). OCF's are usually similar, if not the same.

If you're holding the funds off Vanguard (which is definite, as Vanguard don't offer a Junior S&S ISA), then no reason to pigeon-hole yourself to a Vanguard fund either.

Most people holding Vanguard funds do so because they invest on the low cost Vanguard platform (which only offers their own funds).

I think most usually suggest slapping it in HSBC FTSE All-World Index Fund C. VLS100 is (in my opinion) a bad fund for reasons often discussed on this forum.

https://monevator.com/best-global-tracker-funds/

j_netprofit

Thank you all for your help and comments!

I've decided to run with 'FIDELITY INDEX WORLD FUND P ACC'.

Really glad I joined the forum!

wmb194

jay_ftw said:

This video seems to agree that ETFs here in the UK cannot be bought fractionally. 

You certainly can, for instance with Trading212 and InvestEngine. I don't know whether they offer Jisas, though.