Saving for children? Junior ISA risks?

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I'm thinking about setting up a Junior ISA for our child.

At the moment the JISA annual limit is £4,000 and you can use Hargreaves Lansdown to invest in shares and hopefully get a 5% return. For a newborn that would mean a potential contribution of £72,000.00 over 18 years, 5% investment growth of £45,676.59, total of £117,676.59 when the child turns 18.

Annual fees are 0.45% which works out at £18 for the first year and £450 if you have £100,000 towards the end (seems reasonable to me if you can get 5% per annum)

If Hargreaves Lansdown ever went bust, the shares would still be held in the nominees name (i.e. the parent or guardian). I'm thinking about buying solid blue chip stocks in a diversified portfolio (possibly 10 companies) which pay good dividends.

This seems the best investment from risk/reward ratio perspective but I'd welcome any other opinions or suggestions.

Thanks

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gregf40 said:

I wouldn't pick specific stocks though - just buy a FTSE100 or 250 tracker. Makes life much easier.

I had considered that but the tracker seems to attract additional charges and I wondered if I couldn't do better myself just sticking to blue chip companies and cutting out the deadwood each year.

But I'll look further into it, no less than the great Warren Buffett always recommends trackers over private investing.

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CaptainSensib1e said:

Where do you get 5% return from? .

It was in the advice given by one of the other posters to get a tracker (with the usual caveat " Past Performance is not an indication of future performance.")

http://www.hl.co.uk/funds/fund-discounts,-prices--...

The total return over 5 years was 56.1%