Junior ISA which funds to consider?

[Mikee19]

Hi All,

I am new to investing and hoping you can recommend some funds to consider?

I have just opened a junior stocks and shares ISA for my two year old daughter and looking for 4 or 5 funds that I can forget about for 15 years. I would like to "own the world" and diversify as much as possible.

So far pistonheads favorites seem to be;

Vanguard Life Strategy
Vanguard Global
Fundsmith

Thanks
Mike

[rustyuk]

Having my son's ISA with my SIPP provider saves me a few pounds in fee's I believe. Regarding the funds, I could list the ones I currently invest in but I'm not a FA or have any expertise in the area.

My scientific research into funds was to buy the leading performers of the day. By pure luck it's worked out ok and think I'm looking at a 30% return, compounded of course.

As an aside I thought the 'Own the world' fund had performed dreadfully since it had been launched. The guidance and blurb doesn't seem to be in plain English either.

We started ours when our son was born, all I can say is that he will be able to access it in 4 years and time flies !! Wished we had invested more when he was younger but him being 18 seemed an eternity away.

Edited by rustyuk on Friday 23 July 10:49

[blindspot]

I went with the vanguard lifestrategy 100% equities for my boy's JISA. He's been in since Nov 2018, and vanguard are claiming a 'personal rate of return' of 47.something %. Of course there's been good and bad months, but he'll be invested for 18 years (and hopefully longer, if I can convince him not to spend it on being a knob when he's 18) so plenty of time to see out volatility. Maybe will adjust equities down in a decade or so.

[MikeKite]

Mikee19 said:

Hi All,

I am new to investing and hoping you can recommend some funds to consider?

I have just opened a junior stocks and shares ISA for my two year old daughter and looking for 4 or 5 funds that I can forget about for 15 years. I would like to "own the world" and diversify as much as possible.

So far pistonheads favorites seem to be;

Vanguard Life Strategy
Vanguard Global
Fundsmith

Thanks
Mike

"Fundsmith"

Why do you think this is?

[Mikee19]

Thanks for the replies so far. It is reassuring that I am looking in the right direction, and a JISA seems the right thing to have a go at!

I don't expect financial advise, but I understand why you wouldn't want to list all your funds. Obviously I will research any suggestions myself and take all of the risk.

Cheers
Mike

[dirtbiker]

I've opened a Junior ISA with Intelligent Money for my two-year-old daughter with a few different funds:

IM Optimum Global Growth
IM Optimum Global Growth and Income
PH Recovery
IM Optimum Growth for Withdrawal Strategy
PH Equity

It's only got ~£3.7k in there just now but looks to be performing well.

Julian and the team are a pleasure to deal with so well worth a look.

[Mikee19]

MikeKite said:

"Fundsmith"

Why do you think this is?

Not sure I understand you.

Terry Smith

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[rustyuk]

Here you go,

XTRACKERS NIKKEI 225
VANGUARD INVESTMENTS UK LTD LIFESTRATEGY 80 PERCENTAGE EQTY ACC NAV
BLACKROCK FUND MANAGERS LTD ISHARES US EQUITY INDEX UK D ACC
BAILLIE GIFFORD & CO GLOBAL INCOME GROWTH B ACC

Blackrock is my best performer.

[Mikee19]

Thanks all!

[BobToc]

Hard to look past VWRL or LifeStrategy100 in my view.

[MikeKite]

Mikee19 said:

MikeKite said:

"Fundsmith"

Why do you think this is?

Not sure I understand you.

Terry Smith

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Of all the 1000s of funds available, I'm not sure why he is so popular.

[thekingisdead]

I use Vanguards Global All cap for the lads JISA.

With small cap and emerging markets it’s about as broad as a passive index fund gets IMO.

Of course there’s life strategy if you’re UK based was some increased domestic exposure / lessened FX volatility.

He was born just before COVID so the fund has done well from the covid drop. All luck but I’ll take it!

[trickywoo]

MikeKite said:

Of all the 1000s of funds available, I'm not sure why he is so popular.

Last five years it’s been 6% annualised better than Vanguard 100, so you may be better asking why Vanguard is so popular.

What do you think is wrong with Fundsmith?

[MikeKite]

trickywoo said:

MikeKite said:

Of all the 1000s of funds available, I'm not sure why he is so popular.

Last five years it’s been 6% annualised better than Vanguard 100, so you may be better asking why Vanguard is so popular.

What do you think is wrong with Fundsmith?

"so you may be better asking why Vanguard is so popular."

I'm assuming diversification and risk would come into it, and more knowledgeable investors understanding where the "better" returns have come from.

"What do you think is wrong with Fundsmith?"

I'm not saying anything is right or wrong, just don't understand why private investors have piled into it, given that past performance comes with so many warnings.

[simong800]

MikeKite said:

Mikee19 said:

MikeKite said:

"Fundsmith"

Why do you think this is?

Not sure I understand you.

Terry Smith

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Of all the 1000s of funds available, I'm not sure why he is so popular.

It's been one of the best performing global funds available since launch, with some of the lowest volatility on offer. Why would it NOT be popular? Odd comment.

[simong800]

dirtbiker said:

I've opened a Junior ISA with Intelligent Money for my two-year-old daughter with a few different funds:

IM Optimum Global Growth
IM Optimum Global Growth and Income
PH Recovery
IM Optimum Growth for Withdrawal Strategy
PH Equity

It's only got ~£3.7k in there just now but looks to be performing well.

Julian and the team are a pleasure to deal with so well worth a look.

The IM Optimum Global Growth Portfolio has a load of gold, gilts etc which are going to be a drag on performance. That combined with a big overweight to the UK means it's massively lagged a bog standard global index tracker available at 0.07% OCF. Given the long timeframe, is there a reason for picking funds that aren't 100% equities?

IM Website is showing the "Optimum" growth portfolio returning 8.83% annualised over 10 years compared to a bog standard global index tracker (L&G International Index trust) returning 12.47%.

Based on a £10k investment over 20 years that's the difference between having £54k at the end of it versus £104k (without taking fees into account, the L&G one is dirt cheap)

Edited by si800 on Friday 23 July 13:26

[simong800]

Mikee19 said:

Hi All,

I am new to investing and hoping you can recommend some funds to consider?

I have just opened a junior stocks and shares ISA for my two year old daughter and looking for 4 or 5 funds that I can forget about for 15 years. I would like to "own the world" and diversify as much as possible.

So far pistonheads favorites seem to be;

Vanguard Life Strategy
Vanguard Global
Fundsmith

Thanks
Mike

If you truly want to forget about it I'd suggest passive not active. Actives need some extent of monitoring to ensure you avoid a disaster (if someone had bought Woodford and "forgotten" about it they'd be in for a nasty surprise when they remembered).

I'd avoid Life Strategy due to the UK overweight which has been a clear drag on performance versus a bog standard index tracker (why would anyone want more of the dinosaur FTSE 100 companies when you have the choice not to!).

Considering the long time frame you have I'd go very simple;

70% global tracker
20% global small cap tracker (should outperform over a very long time frame, extra alpha)
10% global tech index tracker (for extra alpha)

[MikeKite]

si800 said:

MikeKite said:

Mikee19 said:

MikeKite said:

"Fundsmith"

Why do you think this is?

Not sure I understand you.

Terry Smith

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Of all the 1000s of funds available, I'm not sure why he is so popular.

It's been one of the best performing global funds available since launch, with some of the lowest volatility on offer. Why would it NOT be popular? Odd comment.

"It's been one of the best performing global funds available since launch"
The timescales are too short to identify whether it is luck or genuine skill, unfortunately. The chances of persistent (more than the last decade, which has been a one-way bet for his style of investing) long-term outperferformance is pretty remote, and his returns are explainable by the tailwinds he has received to date.

"with some of the lowest volatility on offer"
Volatility is just one measure of risk - there are at least three others that apply in this case.

"Why would it NOT be popular?"
See above

"Odd comment. "
It's no really odd once you start to dig down beyond just the headline numbers.

[MikeKite]

si800 said:

Mikee19 said:

Hi All,

I am new to investing and hoping you can recommend some funds to consider?

I have just opened a junior stocks and shares ISA for my two year old daughter and looking for 4 or 5 funds that I can forget about for 15 years. I would like to "own the world" and diversify as much as possible.

So far pistonheads favorites seem to be;

Vanguard Life Strategy
Vanguard Global
Fundsmith

Thanks
Mike

If you truly want to forget about it I'd suggest passive not active. Actives need some extent of monitoring to ensure you avoid a disaster (if someone had bought Woodford and "forgotten" about it they'd be in for a nasty surprise when they remembered).

I'd avoid Life Strategy due to the UK overweight which has been a clear drag on performance versus a bog standard index tracker (why would anyone want more of the dinosaur FTSE 100 companies when you have the choice not to!).

Considering the long time frame you have I'd go very simple;

70% global tracker
20% global small cap tracker (should outperform over a very long time frame, extra alpha)
10% global tech index tracker (for extra alpha)

I'm not clear what you mean by alpha.

"Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index"

[simong800]

MikeKite said:

"It's been one of the best performing global funds available since launch"
The timescales are too short to identify whether it is luck or genuine skill, unfortunately. The chances of persistent (more than the last decade, which has been a one-way bet for his style of investing) long-term outperferformance is pretty remote, and his returns are explainable by the tailwinds he has received to date.

"with some of the lowest volatility on offer"
Volatility is just one measure of risk - there are at least three others that apply in this case.

"Why would it NOT be popular?"
See above

"Odd comment. "
It's no really odd once you start to dig down beyond just the headline numbers.

But worth noting it has outperformed all other quality funds with a 5+ year track record who have had the exact same market environment, stylistic tailwinds, low interest rate environment, etc. Perhaps trying charting it against Morgan Stanley Global Brands, Ninety One Global Franchise, Trojan Global Equity etc (who all focus on high ROIC/ROCE, high intangible assets etc type firms). Clearly TS has had a very favourable environment (which many holders of it totally overlook), but so have the others which is where manager skill comes into it (or he just got lucky for a decade whilst they didn't). It's also worth considering his career and successful track record started a long time before Fundsmith started. Personally I only have 10% of my portfolio in it as the investment universe he has is too narrow for me to commit more.