S&S JISA Choices

RetirementJohn

Hi

I'm looking into JISAs for a 2 year old and a 4 year old and could do with some help to make a final choice please.

I'm not savvy enough to manage this myself ongoing, so looking for a provider that will allow the investment to grow whilst keeping costs low. There will be a lump sum invested, followed by regular monthly payments and ad-hoc lump sums.

I've whittled it down to Fidelity and Vanguard, partly thanks to this and other forums as well as a trawl of financial websites.

Fidelity has no platform fee, and a 0.20% ongoing fee, whilst Vanguard has a 0.15% platform fee and 0.22% ongoing fee. 
I've used Fidelity's navigator, risk 4 (out of 5) and its suggested Fidelity Multi Asset Allocator Adventurous, which is around 80% equity.
Using Vanguard's risk profile (5 out of 7 - there were no options at 6 or 7 btw) it sends me towards their Lifestrategy product with options of 80% or 100% equity.

Some questions:

• Any other funds I should be looking at?
• Any advice on Lifestrategy 80% vs 100% - I'm looking at well over 10 years investment cycle, but is 80% more sensible (I don't want to blow the kid's cash)? 
• Presumably in any case I can shift it to another fund with lower equity as the kids get closer to 18?
• Both funds mention transaction costs. I believe any transactions will be done by the provider as I'm looking for a fund solution, What are typical transactions - presumably around rebalancing? Is there any material difference in the way each of the funds will trade that I should consider. Or have I missed the point here?

All advice gratefully received, thank you.

John

Alexland

For the past few years my young kids have had the free (provided you stick to funds) Fidelity JISA (and SIPP) and are invested in the Fidelity Index World fund at 0.12% (they discount to 0.10% when the holding gets big enough to bother paying rebates). Their webpage for the Index World reports the transactions costs as 0.00% but there will be some although being passive it will be less than most funds.

I will be derisking them by moving an increasing % of the account valuation into a money market fund (or using a multi asset fund) as they get closer to withdrawal age whenever that might be. For example they might not want to spend the money at 18 and decide to allow it to mature into an adult ISA and stay invested towards a house deposit or whatever. Judge closer to the time and it may be cheaper to transfer the ISA elsewhere at 18.

xylophone

https://monevator.com/low-cost-index-trackers/comment-page-3/

https://monevator.com/etfs-vs-index-funds-differences/

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

https://monevator.com/passive-fund-of-funds-the-rivals/

Albermarle

OP - You are are on the right lines.

Normally a 100% equity fund as suggested by Alexland, is probably the best choice, but would be a bit too volatile for most investors as most are more in the medium risk sector.
However the kids will not be watching it go up and down so maybe not a problem.
Having said that an 80% equity fund is not going to behave that differently either.
The Vanguard one has a UK bias which has reduced performance in recent years.
Do not worry about transaction fees, they are not really relevant.

RetirementJohn

Thank you all for sharing thoughts and resources - much appreciated and looks like I have a little bit more homework to do