JISA for Daughter

[Walrus]

Well I have just extended my likely retirement point by gaining a daughter

So I have been mulling over starting a JISA for her. Obviously this will be invested for the long term so really looking at equities here and I envisage investing monthly into it prob around the 100 pounds mark.

On the investment front I was considering something like 50 % SMT and 50% LTGE, but I'm starting to doubt myself and wondering if I should just put it in HSBC All World Ftse. Certainly there is going to be no single share investing going on. Just want to drip feed money and not look at it.

Does anyone have any thoughts on the above

[StOmer]

Hi,
We can not know the future but I have back-tested many such portfolios against the likes of Vanguard Life Strategy and HSBC trackers, I have done this as we are considering moving into the Vanguard stable. However, in all cases holding an active portfolio has outperformed the index fund. The difference is not always huge but it can be considerable. I would go for the active choice which will require keeping an eye on things from time to time.

[forrado]

I take the opposite view to that of the previous poster. 15 to 10 years ago it would have been no-brainer to feed £100 a month into one of the globalist ITs. But that was 15 to 10 years ago and all those appetising double-digit discounts then on offer is now a distant memory. The general state of the going from here will be less accommodating as a result. Back testing is no prologue to a set of circumstances being repeated.

That said, if the OP wants to buy-the-world, as represented by the FTSE All World index, at a rate of £100 a month for his daughter then he has two choices – Vanguard’s EFT and HSBC’s OEIC.

In his shoes I’d come down on the side of the HSBC FTSE All-World Index Fund Accumulation C.
http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000TXY8

By choosing the accumulation units means no hassle dealing with dividend reinvestment issues. In terms of charges, HSBC fund’s annual running costs of 0.2% is 5 ticks cheaper than Vanguard’s 0.25% so, only a small insignificant saving to be made there.

As a guide, if I run the numbers through a CAGR calculator then annual monthly contributions totalling £1,200 per year compounding at an annual rate of 7% over a period of 18 years comes out at £40,800 more or less. Run the numbers again but at a CAGR of 6% and the answer comes back as a lesser £37K plus change.

[Walrus]

I take the opposite view to that of the previous poster. 15 to 10 years ago it would have been no-brainer to feed £100 a month into one of the globalist ITs. But that was 15 to 10 years ago and all those appetising double-digit discounts then on offer is now a distant memory. The general state of the going from here will be less accommodating as a result. Back testing is no prologue to a set of circumstances being repeated.

That said, if the OP wants to buy-the-world, as represented by the FTSE All World index, at a rate of £100 a month for his daughter then he has two choices – Vanguard’s EFT and HSBC’s OEIC.

In his shoes I’d come down on the side of the HSBC FTSE All-World Index Fund Accumulation C.
http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000TXY8

By choosing the accumulation units means no hassle dealing with dividend reinvestment issues. In terms of charges, HSBC fund’s annual running costs of 0.2% is 5 ticks cheaper than Vanguard’s 0.25% so, only a small insignificant saving to be made there.

As a guide, if I run the numbers through a CAGR calculator then annual monthly contributions totalling £1,200 per year compounding at an annual rate of 7% over a period of 18 years comes out at £40,800 more or less. Run the numbers again but at a CAGR of 6% and the answer comes back as a lesser £37K plus change.

Thankyou for the numbers, when you put it like that it seems a no brainer. I guess my issue with it is, for my own investments I pursue an active approach, apart from my workplace pensions which are sat in broadly 70/30 Equity/Bond funds which I leave well alone. I may just go 50/50 which is effectively what I am doing with my own investments

[midgesgalore]

Well I have just extended my likely retirement point by gaining a daughter

Congratulations Walrus.

midgesgalore

[Nocton]

I'd go for a couple of ITs as in your original idea. We started a general IT - Witan - for each of our grandchildren (pleasures to come!) and when they were 9 increased the monthly payment and added SMT. Have done quite a bit better than 7% a year. When I last checked it was over 11% which has made a huge difference to the returns. I don't think that IT discounts have much to do with it, as when you are investing regularly they are smoothed out. In fact over the last 15 years - the relevant period for our grandchildren - FTSE trackers have not performed particularly well.

[Muddywaters]

I have a JISA for my daughter (4) and son (2). Both vanguard lifestrat 100% equity. I also do £100 p/m for each of them

I’m roughly 50/50 passive and active (ITs) for my own money but for the kids money i just felt that over the next 18 years, with no real target, and being happy with market return I may as well go for a tracker (fire and forget, I appreciate the life-strategy isn’t a proper passive but it’s close enough ). I’ll switch to vanguard all world when it starts making sense charges wise to switch (I’m with Hargreaves)

[baldchap]

JISA and SIPP with a very pedestrian MYI/CTY/HFEL.
Monthly top up to whichever is thirstiest.

Went down the dividend route as opposed to pure growth so I could chart quarterly income and hopefully educate her re compounding, and saving in general. She will be able to understand it soon.
It is a remarkably stress free way to invest. I may be tempted to set up a 'basket'.

[BrummieDave]

I have two:

80% LifeStrategy (100% Equities), 10% SMT, 10% F&C IT

80% LifeStrategy (100% Equities), 10% Fundsmith, 10% F&C IT

Following the strategy of get rich slowly with a little added sizzle for interest.

[TUK020]

JISA and SIPP with a very pedestrian MYI/CTY/HFEL.
Monthly top up to whichever is thirstiest.

Went down the dividend route as opposed to pure growth so I could chart quarterly income and hopefully educate her re compounding, and saving in general. She will be able to understand it soon.
It is a remarkably stress free way to invest. I may be tempted to set up a 'basket'.

This is largely how i have set up my kids. Also, where I have been asked for advice from friends, I say that I am not qualified to give advice, but am will to share what I do for the kids which is as above.