Where would you put it ?

[Here4thechocs]

Hello,

I’d greatly appreciate you all lending me your thoughts/expertise , please.

I’ve recently moved my children’s savings to Vanguard but currently being held in their Jnr ISAs in cash. I’m aware this isn’t the smartest move , I.e held in cash but I’m at a loss as to what to invest it in for them.
if it’s any help, their ages are 13 & 10. They both have just under £8k each and we have a DD of £100 each going into their accounts , too.

I’d very much appreciate suggestions/pointers , please.

Look at the lifestrategy funds? Ls80 would give you a good mix and a decent record.

Vwrl is my choice!

Thank you , @aramox1 &@DenmarkStreet would have a look at both.

DD's vanguard junior isa is invested in FTSE Developed World ex UK equity index. We also have a monthly direct debit and it has performed very well, particularly since the equity markets have shown some recovery. We like the global reach but I generally think UK has consistently underperformed v US and European markets.

Agree this is like 101 / starting point and fairly steady bet.

I have about 50% of DDs savings in here

The downside of Vanguard Life Strategy funds is their weighting towards UK equities, which have been under performing for some time.

A note of caution - what are your plans for the Junior ISAs?
Your oldest child at 13 - will they want to access the investments at age 18 in 5 years time? If so, this is quite a short time frame for starting S&S investments. There is a risk that returns might not match those of cash savings accounts within this window, volatility risks if there is a fixed end point such as Uni costs, and of course risks to capital. I would also suggest that even for the youngest child, who would have eight years investing, this is still quite limited time frame.

@seekingasimplelife thanks for your thoughts. We are looking at both of them potentially drawing on them much later than ‘varsity starts. House deposits, perhaps….which brings me to what would your preference be , please, if you don’t mind?

I’d not bother with lifestrategy, esp for kids

FTSE global all cap or developed world ex UK.

Thank you. I’d have a look at these as well.

Much appreciated.

@BeccaBean sorry to be nosey but what is the bench mark for "very well".
Current cash isa rates are 3 to 5%.

@Here4thechocs

We invest thru hargreve and we have a mix of things, some vanguard and s and p 500, I took a punt on rolls Royce shares they are up 190%...but most index funds.

Your DCs could potentially blow it on whatever they want - donate it all to an obscure charity if they so choose on their 18th birthday, as it's in their name and you could not prevent it.

My preference...
Cease contributions to the JISAs and start some investments in your own name to hand over when you are clear they will handle it responsibly.

For an investment in their own name start a pension for them, which they can track and continue to make contributions when they start to earn. It will help demystify the whole concept of pensions and investments at a relatively early age.

If you also start Investments held in your own name - choosing a range of financial products which DC can track, investigate and compare by performance - such as high interest cash savings, an index fund, gold bullion coins (Sovereigns) is a useful strategy for introducing them to sound financial principles. Overall returns would be less of a focus than fostering their confidence and knowledge of wealth-building over time and learning how to compare the merits of each investment.

For the current JISAs - What is your risk appetite?
If your focus is on growing the capital to give them a lump sum with minimal risk then move to cash JISAs and switch regularly for the best rates and bonuses, particularly if you think they will want access within a shorter time frame.

If you think DC will leave the money invested beyond 18 for the longer term, and you are willing to take some risk and accept the volatility of the market, have a look at Trustnet Multichart tools to compare how index funds such as those mentioned above have performed over time (with the oft repeated caution its no guarantee of future performance). For instance S&P 500 has consistently outperformed the FTSE Developed World ex UK Index, and the FTSE Global All Cap over time, but the latter two show less volatility. The Vanguard LifeStrategy 80% is beaten by these three on performance, but it's also the least volatile investment.

@StuckintheRutt

Sorry to jump in but this might be helpful:

Cumulative Performance

Vanguard S&P 500 : 5yr = 98% 10yr = 305%

Vanguard FTSE Dev World ex UK: 5yr = 75% 10yr = 207%

Vanguard LifeStrategy 80% equity: 5yr = 40% 10yr = 112%

Oh wow ! Such an interesting outlook on this certainly & I’m truly grateful. Thank you.

@seekingasimplelife thank you for your insight. 🙏

Grabdparent set 1 run JISAs for ours who are just 4 and just 8.

However we don’t. We put our regular “university” fund monthly DD plus v generous yearly gifts from Grandparents set 2 into a Vanguard stocks and shares ISA held in my name. It’s earmarked for them - but DC will have no access to it at all.

(I appreciate those on UC might not have the option to have savings of their own this way but this wasn’t a factor for us).