CHILDREN
head of research Mark Dampier
described the fund as the perfect
JISA holding. This is because given
its closed-ended structure and the
nature of what it invests in, it is
not a fund for anyone unwilling to
invest for at least 10 years.
saving for the princess wedding of
the century? To date I have been
guilty of not starting their Junior
ISAs – but this is the year. The
question is, what would be the
best savings vehicles to put regular
monthly amounts in to so that
when the time comes, the king in
this fairy tale won’t go bankrupt?
According to research from the
AIC, an investment of £50 each
month in the average investment
trust would have grown to the
hefty sum of £28,584 over the past
18 years. Meanwhile a lump sum
investment of £4,080, which is the
full Junior ISA limit for the tax year
2015/16, in the average investment
trust 18 years ago would today have
grown to £18,135. Both attractive
amounts for the big day.
Sadly for me, I can’t put my
money in an “average” investment
trust, so choices need to be made.
With Elsie I have a 15-year strategy
before she reaches 18 to build
up a good pot. It is the perfect
long-term horizon, so should my
investing process be one of go hard
and risky for, say, the first 10 years,
before playing it more cautious in
the last five?
James Calder, head of research at
City Asset Management, says with
such a long-term horizon to play
with, in the early days there is not
much point bothering with
fixed income or balanced managed
mandates, although they could
come into play later in the life of
the investment. Instead he says the
best move is to “take as much risk
as you can stomach”.
WIDOWS AND ORPHANS
This rules out the so-called
widows and orphans trusts,
namely the global growth beasts
6
BY INVESTING IN
ESTABLISHED HOUSES,
INVESTORS HAVE THE
PEACE OF MIND THAT
WHEN ONE MANAGER
LEAVES, THEY WILL BE
REPLACED BY ANOTHER
WHO CAN KEEP IT GOING
such as Witan, and brings into
play trusts that invest in more
specialist areas. Two possible
names for inclusion are Fidelity
China Special Situations and Neil
Woodford’s Patient Capital Trust.
Under the management of Dale
Nicholls, who replaced Anthony
Bolton in April last year, Fidelity
China Special Situations is up 69.1
per cent in the past 12 months.
More impressively, despite a slow
start it has made140 per cent over
the past three years and is up 78
per cent since launch in April
2010. Not bad for a fund many
wrote off after a difficult first three
years under Bolton.
For Calder, however, investing
solely in China is a bit too limited
and he would prefer to widen the
hunt to global emerging markets
and south-east Asia. In this space
he says you have the choice of
several high profile trusts from
the large investment houses of JP
Morgan and Aberdeen to name
but two.
So what of Woodford? Prior
to the launch – which taking in
£800m during the offer period
was the largest in investment trust
history – Hargreaves Lansdown’s
KEY-MAN RISK
Calder is not so sure. While not
doubting Woodford’s credentials,
his problem is that given the
time horizon involved, key-man
risk becomes a problem. Will
Woodford still be running the
fund in 20 years? Unlikely. By
investing in established houses,
such as those already mentioned,
he says investors have the peace
of mind that when one manager
leaves, they will be replaced by
another who can keep it going.
“You also want to look at trusts
which are reasonable in size
and won’t get taken out by a
competitor,” he added.
Plenty of options to consider
then in my aim of getting close
to the “average” the AIC referred
to. Of course Elsie may not want
to get married; she may want to
put the money towards a house
or a car. Or, if I asked right now, a
princess’s castle…
BREAKDOWN OF AVERAGE
WEDDING COSTS
1
Venue
£3,397
2
Honeymoon
£3,164
3
Food
£2,882
4
Engagement ring
£1,772
5
Drink
£1,187
6
Wedding dress
£1,098
7
Photography
£992
8
Entertainment
£692
9
Video
£659
10
Other
£5,140
Total
£20,983
Source: You & Your Wedding
trustnet.com