Junior ISAs

[TheCyclingProgrammer]

Whilst I've finally got around to researching pension and long term savings options for myself, I've realised I need to get around to sorting something out for my children. My eldest is nearly 6 and I have about a grand set aside to invest as a lump sum for her. My youngest is nearly 1. We're just coming to the end of paying off a short term loan and the plan had been to take the £200 extra we'll have each month when the repayments end and stick £100/month for each of them into a Junior ISA.

I did open up a cash ISA for my eldest a few years ago and forgot to put anything in it. Everything I'm reading says a stocks and shares JISA is the way to go as its far more likely to outperform cash over the length of time we're talking.

I've set up JISAs with Hargreaves Lansdowne. I've read some people advising if you want to be hands-off, just invest it all in a fund like Vantage LS 80 or even Vantage LS 100 and just forgetting about it. My youngest could have a pot of around £29k by the time she's 18 (average case) or close to £38k (best case).

The only catch to me is I'm not entirely comfortable with where some of these funds invest their money. I could probably live with myself investing in whatever for myself but I'm not really comfortable with investing my child's future money in tobacco and certain pharmaceutical companies.

I'm aware there are "ethical" funds but the definition of ethical is cast pretty wide and it depends on your priorities. This is one I had my eye on:

Kames Ethical Equity (Class B) Accumulation Fund Price & Information

I realise making ethics a priority is likely to negatively impact the longer term returns. Does anyone else use a JISA for their children and if so what do you invest in?

[The_Equalizer]

Whilst I've finally got around to researching pension and long term savings options for myself, I've realised I need to get around to sorting something out for my children. My eldest is nearly 6 and I have about a grand set aside to invest as a lump sum for her. My youngest is nearly 1. We're just coming to the end of paying off a short term loan and the plan had been to take the £200 extra we'll have each month when the repayments end and stick £100/month for each of them into a Junior ISA.

I did open up a cash ISA for my eldest a few years ago and forgot to put anything in it. Everything I'm reading says a stocks and shares JISA is the way to go as its far more likely to outperform cash over the length of time we're talking.

I've set up JISAs with Hargreaves Lansdowne. I've read some people advising if you want to be hands-off, just invest it all in a fund like Vantage LS 80 or even Vantage LS 100 and just forgetting about it. My youngest could have a pot of around £29k by the time she's 18 (average case) or close to £38k (best case).

The only catch to me is I'm not entirely comfortable with where some of these funds invest their money. I could probably live with myself investing in whatever for myself but I'm not really comfortable with investing my child's future money in tobacco and certain pharmaceutical companies.

I'm aware there are "ethical" funds but the definition of ethical is cast pretty wide and it depends on your priorities. This is one I had my eye on:

Kames Ethical Equity (Class B) Accumulation Fund Price & Information

I realise making ethics a priority is likely to negatively impact the longer term returns. Does anyone else use a JISA for their children and if so what do you invest in?

I've done it for my two kids when they were born - now two and five. The only difference being I've chucked some of the savings pot into relatively risky shares I've picked with the idea that some should go spectacularly well to offset the duff ones. I did have index-linked NS&I savings certs, but they've been pulled, and plain child savings accounts. Also, kid's savings accounts offer relatively good interest rates.

Child Savings Accounts - Money Saving Expert

[lukemg]

I am doing this too - into emerging market indexes (trying to offset the greater volatility with the time to even it out) BUT any new money is going into a global ETF VWRL, fire and forget.
Be aware they can run it themselves from 16 and access the cash at 18, not sure that is the best age to be making super decisions with 40k (yeah, I know your kids are brought up proper and wont do anything crazy) but I know lots from nice stable families who do...
So - some have said better to chuck it into an ISA in your name (ring-fence a percentage if that makes you feel better and keep the control that way) With 20k from april (40k including the missus) that is probably enough to be investing for most, no ?
Then, when they need/want a car/flat you are able to oblige.

GLA

[TheCyclingProgrammer]

Anyone got any thoughts on ethical funds?

[The_Equalizer]

I am doing this too - into emerging market indexes (trying to offset the greater volatility with the time to even it out) BUT any new money is going into a global ETF VWRL, fire and forget.
Be aware they can run it themselves from 16 and access the cash at 18, not sure that is the best age to be making super decisions with 40k (yeah, I know your kids are brought up proper and wont do anything crazy) but I know lots from nice stable families who do...
So - some have said better to chuck it into an ISA in your name (ring-fence a percentage if that makes you feel better and keep the control that way) With 20k from april (40k including the missus) that is probably enough to be investing for most, no ?
Then, when they need/want a car/flat you are able to oblige.

GLA

Do you have to tell them at 16 or 18? If you kept mum until at least you can be reasonably sure they are not going to blow it on daft cars/nights out etc then what would be the harm?

[RonBW]

Does anyone else use a JISA for their children and if so what do you invest in?

St James Place junior ISA with a spread across multiple funds. Pay in £100 a month per child - currently they have around £17k each (useless CTF performance in the past).

JISA is a much better deal than the CTF used to be - one year I added £1200 to the CTF and the total increase for the year was £1200.20

[lukemg]

St James Place junior ISA with a spread across multiple funds. Pay in £100 a month per child - currently they have around £17k each (useless CTF performance in the past).

JISA is a much better deal than the CTF used to be - one year I added £1200 to the CTF and the total increase for the year was £1200.20

Ok, sounds like you have it sorted, I would just keep an eye on the charges. Funds are usually terrible, funds of funds are worse and it has a huge impact over long periods. Ultra low cost global tracker smashes ~90% of active funds (probably 100% of funds of funds)over most 10-15 year periods (AFTER CHARGES) because its very hard to make up the charge cost and still out-perform (and you have no idea which will be in the 10%).
Funds can easily be charging 2.5% (headline cost + hidden transaction charges within the fund). That could be third to a half of your total return over time.
monevator.com will tell you why.

GLA