Where to invest matured Junior ISA?

[DaveP]

My eldest is about to turn 18 and go to university. He has approx £16k in a junior (cash) ISA which is about to mature. He (and we) consider this to be medium(ish) term money.

So where to invest? I currently pursue a HYP(ish) strategy so I'm torn between whether to recommend him the standard(ish) advice of “Bung it all in a global tracker” or whether to advise him to go for something like the Vanguard UK Equity Income Fund (which I see as HYP substitute) where he will see a periodic return on investment which will hopefully encourage him to invest more in the long term.

Typing this, I realise that the actual investment isn't that important, but that I'd like to give him a bit of investment education (which is hopefully not too financially disastrous) to get him thinking.

What say you good people?

(And apologies to the mods if this is in the wrong section).

[Itsallaguess]

My eldest is about to turn 18 and go to university. He has approx £16k in a junior (cash) ISA which is about to mature. He (and we) consider this to be medium(ish) term money.

So where to invest?

I currently pursue a HYP(ish) strategy so I'm torn between whether to recommend him the standard(ish) advice of “Bung it all in a global tracker” or whether to advise him to go for something like the Vanguard UK Equity Income Fund (which I see as HYP substitute) where he will see a periodic return on investment which will hopefully encourage him to invest more in the long term.

Typing this, I realise that the actual investment isn't that important, but that I'd like to give him a bit of investment education (which is hopefully not too financially disastrous) to get him thinking.

What say you good people?

If the primary aim is education, and I would also tend to take that view at this stage, then have you considered splitting the sum into both an 'income' section and a 'growth' section?

Not only could he see the long-term returns from such a strategic-split, in terms of the actual total-returns and the internally-generated processes that go on to deliver them, but he would hopefully also get a more personal feel for his own 'investment personality' at the same time, which I have always considered to be an important aspect to very long-term investing, where an alignment between strategy and investment-personality is important to help investors 'stay the course' in whatever particular approach is eventually taken...

Cheers,

Itsallaguess

[AsleepInYorkshire]

My eldest is about to turn 18 and go to university. He has approx £16k in a junior (cash) ISA which is about to mature. He (and we) consider this to be medium(ish) term money.

So where to invest? I currently pursue a HYP(ish) strategy so I'm torn between whether to recommend him the standard(ish) advice of “Bung it all in a global tracker” or whether to advise him to go for something like the Vanguard UK Equity Income Fund (which I see as HYP substitute) where he will see a periodic return on investment which will hopefully encourage him to invest more in the long term.

Typing this, I realise that the actual investment isn't that important, but that I'd like to give him a bit of investment education (which is hopefully not too financially disastrous) to get him thinking.

What say you good people?

(And apologies to the mods if this is in the wrong section).

Would you mind if I congratulated you on supporting your son financially in a JISA. I think I'd suggest Warren Buffett's advice. Invest in the SP500 Index. I'd also suggest you drip feed the cash into this fund, at least over three years but better over four. It will cost more, but will protect from downside as you will buy the dips as well as the ups. Pound cost averaging it's called. I'd suggest you buy £1,000 worth every three months.

We gave up a new kitchen to be able to put money into a JISA for our daughter. I know it's spooky but I had similar thoughts about one of my pension pots, which is not doing too well, earlier today. I'm going to transfer it to the SP500 over 4 years by drip feeding it.

AiY(D)

[tjh290633]

First of all, what is it invested in now? Is there any reason to change from that investment? How has it done relative to the market? What has been the IRR since inception?

Is your logic to switching to a tracker that it's an invest and forget option? If you want him to learn about investing, a passive fund will not do that. Investment trusts are a halfway house to "proper" investing, involving as they do dealing on the market.

At the moment too many unknowns to comment.

TJH

P.S. just noticed that it is a cash ISA. I assume that your own investing has followed the HYP approach.

[kempiejon]

My eldest is about to turn 18 and go to university. He has approx £16k in a junior (cash) ISA which is about to mature. He (and we) consider this to be medium(ish) term money.

Glossing over some of the questions like, cash emergency funds, debts, kids, mortgage, health, risk appetite, partner etc as he's 18 and you're asking. A pension might be worth considering though that's obviously very long term. He would have a £2880 SIPP allowance tax free with a rebate grossing up to £3600 that would more than cover the cost to hold it. He could fill that each year for a while leaving some available for a big expense and a great start to 40+ years investing habit.

Medium(ish) term say 3-5(ish) years? A stock market investment could re-value it at less than £16k if he needs to access it in a rush. By the time he's out of university he could owe several times that, not sure what the prevailing rates for student borrowing is and depending upon the degree and job market he might have to start repaying.

As you say the well worn adage of stick it in a global tracker is a good answer, there are some global collectives that have a good history too. If I'd done that with my teenage savings and got into the habit of adding to it regularly I'd probably be much richer than I am now. The education thing of investing can be expensive, I have some choice picks that fell to zero. Perhaps a global tracker alongside other themes might teach him that it is a good enough strategy. Can he get the equally/more important habit of investing regularly? University doesn't really leave any spare cash for saving, I worked evenings and holidays during my studies, got a grant but usually ran out of money before I ran out of term plus flows were erratic. I also had a lot of fun and wasn't interested in being mature enough to have a long term financial plan.

If you go the route of single share selection Halifax Share Dealing (other providers are available) offer fee free trading on their pooled investment days there's £36 per year to hold an ISA - make sure you keep ISA intact if you do look to move providers.

[rhys]

The OP's already made some decisions, since the jISA would originally have been a CTF.

My kids are 14 & 11. I've treated their CTF and jISA as very long term savings vehicles. The oldest's is now worth well over £100k. I decided very early on that I'd only invest in ITs. The children should not be exposed to single company risk, no matter how strong my conviction. The youngest's is worth £80k.

The eldest's is with F&C. Over the years I've narrowed down to just FCIT and GSCT.
The youngest's jISA gives much more choice, so I've been able to be more active. Currently BRSC, FCIT, MWY, MNKS, MYI and some cash pending something for the Asia - IAT, JAGI or ATR ?

[Kantwebefriends]

When I was about that age the best thing I did with my money was buy personal transport - in my case a motor bike. It hugely increased the number of vacation jobs I could choose from.