Recommend me an investment fund for Child Benefit allowance

[sicasey]

Instead of frittering away the small monthly child benefit allowance we receive (£82.80) for our new born, from the government, I figure it would be best practice to try and invest it wisely in the vain attempt that it may be worth considerably more in +18 years time.

So far I've been buying a few technology stocks - Apple / Microsoft thinking that in years to come they will have cornered the market with home robots and automated hovering cars in every household. This in the short term doesn't work out well due to the £12 commission for each trade and just shows a huge loss. And without a lump sum to invest there's no real way around this.

I'm figuring that buying into a managed fund every month would be a more sound way of investing such small amounts of money?

I'd really appreciate anyones advise / experience on how best to proceed please.

Cheers.

Edited by sicasey on Monday 5th December 18:32

[oldaudi]

If you are buying shares every month but its costing you £12 per trade you clearly know you need to see a good return before you even cover your trading costs. You should look for a platform which allows regular savings and trades at a low cost. By all means not the cheapest but one I use is Hargreaves Lansdown. If you set up a regular savings from your bank to their platform they will trade shares and funds with very little additional cost, they get their profit by their charges but its certainly not £12 out of a £82 trade. Setting up a Regular Savings with HL and they charge £1.25 per share trade but no cost per fund trade. But look at their costs before you commit

http://www.hl.co.uk/investment-services/isa/saving...

The other thing you need to think about is the type of product you want to buy, If you plan on giving all of this to your child when they hit 18 then you can open an account in "trust" There are tax benefits on some types of accounts.

Perhaps you could look at funds that include tech companies or other blue chip companies rather than buying individual shares in Microsoft as your example. $60 per share and buying 1 at a time with £12 trade isnt going to work,

Fidelity have a Tech Fund that hold hardware and software tech companies for example

Edited by oldaudi on Monday 5th December 18:26

[sidicks]

Given the long investment horizon you have, personally I'd go for a cheap Global equity tracker fund.

[sicasey]

sidicks said:

Given the long investment horizon you have, personally I'd go for a cheap Global equity tracker fund.

Thanks both. Do you have any Global equity tracker funds you could recommend please?

[Ginge R]

sidicks said:

Given the long investment horizon you have, personally I'd go for a cheap Global equity tracker fund.

+1

If you have a really long window, take a view on something like the Black Rock UK Tracker (these days, lots of global exposure), the L&G International Index Trust or the Vanguard FTSE Developed World UCITS. If you fancy US exposure, consider the BlackRock US Equity Tracker and/or the BlackRock North American Equity Tracker (each cost peanuts, 0.08%). They each track different parts of the American stock market (FTSE USA index and the FTSE World North American index respectively). The latter holds a small amount in Canadian shares. There are lots out there, so take an informed view, but above all, keep your costs down to the bare minimum. Cheapest isn't always best, but you just want to invest and forget by the look of it.

https://investorhub.financialexpress.net/factsheet...

https://investorhub.financialexpress.net/factsheet...

[Craikeybaby]

I'm putting money away for my son each month in the Vanguard Lifestrategy 80 fund. It isn't as exciting as tech stocks, but more diverse.

[tankplanker]

I did something similar when my kids were born, I went with simple stock ISAs in mine and the wife's names for them both. I went with an ISA to avoid the tax as I would have done if it it had been in their name and cheap(ish) overheads. The orginal aim was to get enough to cover Uni costs but it won't be enough for that (I'm looking at ~£50k in fees each alone) but it will be a decent deposit on a house.

I could have gone down the route of a trust but I was very weary of letting the kids have full control at 18 to what will be a sizable pot of money. A friend and his brother had a trust fund that matured at 18, both blew the lot (a few tens of thousand each) on rubbish.

[covmutley]

I use bestinvest. Just pick one of their recommended funds.

[Chester draws]

Why not hold it in a separate account till the end of each year, and then invest it £1,000 at a time?

[sicasey]

Thank you all for your replies and information, it's greatly appreciated.

[alephnull]

covmutley said:

I use bestinvest. Just pick one of their recommended funds.

Bestinvest are rather expensive on fees...Hargreaves Lansdown are expensive for funds (but better for ETFs), due to 0.45% platform charge. Charles Stanley are cheaper for funds (and worse for ETFs), if you don't mind the limited selection.