Investor Views: ‘The JISA Funds I’m Topping Up This Christmas’

Retired investor Barbara Sandwell is hoping the investments she makes for her grandchildren will help pay for future university fees

Emma Simon 21 December, 2021 | 11:11PM
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Christmas Chocolate

Barbara Sandwell enjoys buying presents for her grandchildren each Christmas, but she also uses the spirit of festive generosity to make contributions to their junior ISAs (JISA).

Barbara, who is 75, has been investing into JISAs for just over a decade.

“I’ve been investing into a Junior ISA for my grandson since 2010 and for my granddaughter since 2014,” she says.

“My daughter opened an account for each of them when they were born. Since then I’ve been putting money into the accounts on their behalf. My grandson was also lucky enough to benefit from the small amount the government put in at the time – but this wasn’t available by 2014, when my granddaughter was born.”

The Fundamentals

Both Barbara and her daughter make regular monthly payments into the accounts, with further top-up payments often going in around Christmas and birthdays.

“If the children get money for their birthdays or Christmas, they are allowed to spend half and put the other half into the accounts themselves,” she says.

“I think it’s a great way for them to start learning about the importance of putting money aside from an early age and hopefully this will give them a better financial start to adulthood. The money is in addition to presents I might buy them.”

These ISAs are invested in stock market funds. Barbara says her late husband was also an active investor, who held a number of funds within his pension portfolio. When she herself was looking for funds to invest in on her grandchildren’s behalf, she chose strategies with good growth potential.

“Both these JISAs are with Chelsea Financial Services and their Viewpoint magazine is good for fund ideas,” she says.

“We have been invested in Rathbone Global Opportunities since day one. We then added a little in Stewart Investors Global Emerging Market Leaders as the Rathbone one doesn’t really invest in emerging markets. In more recent years as the pot of money has grown, we’ve added Baillie Gifford Global Discovery. I’ve been really pleased with the choices.

“The Rathbone fund was a good core growth fund to start with. We then added some emerging markets as the children obviously have a long time to invest and can take some risk. We added the Baillie Gifford fund so there was a bit more invested in smaller companies too.”

Both the Rathbone Global Opportunities and Stewart Investors Global Emerging Markets Leaders fund have Silver Analyst Ratings from Morningstar, for their cheaper share classes.

Rathbone Global Opportunities has a5-star rating from Morningstar, reflecting its strong growth relatively to peers in recent years. Morningstar says: “We continue to consider Rathbone Global Opportunities a great option for investors seeking exposure to high-growth, mid- to large-cap global equities. Our conviction remains strong in the managers and their ability to add value for investors over the long term.”

The Stewart Investors Global Emerging Markets fund has just a 2-star rating, however. Morningstar points out there have been changes in fund’s management team in recent years. This has led to some shorter-term performance issues. However our assessment points out that it remains a “compelling option” with a “solid investment team and top-notch investment approach.”

Baillie Gifford Global Discovery Fund has aBronze Rating from Morningstar. This is another fund that performed very well in recent years, earning a 5-star rating. According to Morningstar data, it has delivered total annualised returns of 19.16% over the past 10 years. It is also a consistent performer, with similar returns over three- and five-year time scales.

Barbara is pleased with the performance.

“I’m not too concerned about fees, but both the Rathbone and Baillie Gifford funds are very reasonably priced I think. I’m more interested in the performance they give. Chelsea also has 0% platform and service charge for their Junior ISA so that have helped keep overall costs down.”

King Cash

Barbara hopes these savings account will contribute towards university costs or a house deposit.

“As long as they don’t waste it, I really don’t mind though what it gets spent on. Half of the lesson is about the importance of saving so they continue to do this as an adult,” she says.

When it comes to her own savings, however, Barbara is mainly invested in cash.

“I’m 75 and have been retired for about 10 years so I don’t want to take too much risk with my money. I don’t have the same long-term investment horizons that the grandkids have!” she says.

“I have cash ISAs that I move around regularly to get the best deals and a workplace pension that I contributed to when I was working. I was a teaching assistant so West Sussex County Council invested the money on my behalf.”

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk