Best S & S Isa fund for kids

[openallthetime]

Hi there, my son has some savings in a savings account but I'd like to invest these in a tracker fund or something similar (stocks and shares ISA). To be honest I'm a bit clueless about all of this and a little lost at which to go for. Any tips on choosing one? I plan to save about £1k a year, we already have a lump sum of 5k to transfer in.

Should I be transferring it all in, or keep some aside in a savings account?

Having looked briefly online I saw that Fidelity and Vanguard are two that are recommended, but still not sure.

Should I use a UK based fund or something that covers worldwide company? Any recommendations. Totally clueless, thank you for any advice.

The first thing you need to decide is fund platform. I haven't used Vanguard direct, but check the variety of funds they offer as I think (although not sure) that they only offer Vanguard funds.

Fidelity is definitely a fund platform, meaning it is like a fund supermarket and you can invest in Fidelity funds and other funds, including Vanguard. I really like Fidelity - it is easy to use with low fees.

Once you've chosen your fund platform, you pick your investments. Trackers tend to have the lowest fees as they are passively managed by computers and just track the ups and downs of the market. Then there are active funds which have higher fees and are managed by humans. I tend to have mostly trackers now as it means I don't have to keep track of expensive superstar fund managers who then fail to deliver.

You can then invest in individual tracker funds or if you want to keep it simple, there are various lifestyle strategy funds e.g. Vanguard 80/20 (i.e. 80% stocks shares/20% bonds).

The choice is yours, although in this global economy, I would not want to be too heavily exposed to the UK. HTH

thanks so much @savvy7, really helpful. Do you personally use Fidelity then? What sort of fees apply, do they apply when you put money in? or as a percentage of your money growth or something?

It is all a bit mind boggling knowing nothing about it, I'm hoping when I do it that it's a bit easier than I am anticipating. :)

Yes I use Fidelity. There are fees but tbh I can't remember what they are. Money saving expert etc will give you info about fees. It's a balance though between a low cost platform and one which has a good range of funds, is easy to use, has investment data etc.

I switched our ISAs to Fidelity about 18 months ago from Bestinvest. I think Fidelity is far better and cheaper too.

My DD has a Hargreaves Lansdown Junior S&S ISA which is linked to my account so I can easily check it and manage it from my login and app.

HL is a platform like Fidelity, so you invest the money by buying units in funds. I wouldn't put all your son's money into a single fund, with the initial £5k I would split it across 5 or more as some will go down and some will rise so you are spreading risk.

Look at spreading investments over eg UK focus, European, Asian, emerging markets, index trackers, etc. Also you might want to look at investing in sustainable and renewables or other specific sectors.

Hargreaves Lansdown is usually at the pricier end of the market, so check the fees

I'm with HL but if I started again i'd look at Interactive Investor (ii.co.uk) - fees (which over time cut in to your returns) seem lower. They also have some great, comprehensive articles & videos which should help you start on your investing journey.

thanks people! do you think I should maybe wait a couple of months until the dust has settled around Brexit, and covid before investing? Wondering if markets will be affected, and thus my initially invested money may go further in a couple of months? If the market crashes a bit!?

I used Fidelity.

I would just start drip feeding it in now. The whole idea is that your portfolio is diversified - Brexit will have little impact upon what happens in Asia for example - and by drip feeding it in, you have a better chance of smoothing out bumps in the market.

I use HL. It’s better to drip feed in as it has a smoothing effect. Also, you don’t have to invest in UK funds. I only have about 3% in the UK with the rest in global/ US and a little in Latin America, gold and China.

@openallthetime

thanks people! do you think I should maybe wait a couple of months until the dust has settled around Brexit, and covid before investing? Wondering if markets will be affected, and thus my initially invested money may go further in a couple of months? If the market crashes a bit!?

Markets look ahead, so they have already reacted to (and mostly recovered from) Brexit and the pandemic. You have cash so, if markets were unusually low, buying now means getting in before they go up again, increasing the value of your investment.

Hargreaves Lansdown have a lot of plain-language info on starting out in investing, have a look - even if you don't even us using them, I think they explain it well. Also, most platforms will offer a portfolio-builder tool to help you choose which funds to invest in based on your risk appetite etc.

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I put 2k in a JISA with nutmeg for DD and it's gone up by 60 pounds in 6 weeks.

Love the app also, so easy to use.

Fidelity is where I send people. Good fees and good range.

Messers Hargreaves and Landsdown didn’t feature in Times Rich List with low fees.

I use Hargreaves landsdown. But only because I myself had an account. I like it because the app is easy to use and you can link multiple accounts. It has a wide range of funds. Some are free to invest. Where Hargreaves is very expensive is in the cost of trading stocks and some funds outside its wealth 50. £11.50 a trade is outrageous in my view

If I started again I'd not use them

I use aj bell for DD JISA

Invested 1k in a high risk fund and have seen great returns so far
£500 in a moderate risk fund

Left a few hundred in cash and have easily seen more return than a usual bank on just interest

@openallthetime did you make a decision in the end? I'm in the exact same position as you. Have the dc's money in premium bonds, which seem to depreciate daily, and have about 1k a year to invest.