Christmas investment for children – a gift that keeps on giving

Perhaps not as exciting as the sight of presents under the tree this Christmas, but as aptly quoted in The Polar Express, “sometimes the most real things in the world are the things we can’t see”, and putting a little bit aside into an investment company saving scheme for your children this Christmas could certainly pay off in the long run.

Whilst Christmas lists to Santa might contain requests for the latest toy or gadget of the moment, now could be a good time for parents, relatives and friends to consider a gift that will last well into the future.

Over 18 years to the 30 November 2016 a one-off £100 investment in the average investment company would have grown to £476, whilst an annual £100 lump sum investment over the last 18 years would now be worth an impressive £4,992.  Either amount would be a welcome gift to any 18-year-old.

Interestingly over 18 years the higher risk investment company sectors performed the best.  The top performing sector over 18 years is Sector Specialist: Biotechnology & Healthcare, up 1,292%, followed by Country Specialists: Asia Pacific, up 1,147%, Asia Pacific Excluding Japan, up 709%, Global Emerging Markets, up 663% and Private Equity, up 587%.

A gift for the future

If you’re looking to give a gift that’s a bit different this year and is intended as a gift for the future, then an investment company may be worth considering. Investment companies are available from stockbrokers and online platforms and there are a number of manager-sponsored children’s investment schemes and Junior ISAs with affordable minimum amounts, which can be a cost effective option.

Children’s saving scheme minimum monthly contributions start from £25 – £50 and minimum lump sum contributions range from £50 – £250.  Manager sponsored Junior ISA minimum contributions start from £30 per month and £50 lump sum. See below for a list of manager-sponsored investment company saving schemes, or visit the AIC’s website.

Annabel Brodie-Smith, Communications Director, Association of Investment Companies (AIC) said: “Christmas is a magical time of year for children and the prospect of presents is always very exciting. While we all want our children to have lots of toys this Christmas, some presents are quickly opened and shortly forgotten. So it’s not surprising that relatives who want to give something that lasts a bit longer might look to make a contribution to a child’s savings scheme, to help plan for the future.

“An investment company savings scheme gives investors access to the long-term potential of the stock market and, by investing in a range of companies on your behalf, they spread your risk and offer professional fund management. There are a number of specific saving schemes for children available, although any investment company can be used to save for children.”

Manager-sponsored children’s investment schemes

Scheme

Minimum monthly regular savings

Minimum Lump sum

Initial admin/ annual charges

Other charges

Aberdeen Asset Managers

£30

£150

Initial/Admin: Nil. Annual: Nil.

Purchase: Nil. Sale: £10. Transfer Out: £30. Switch: £10.

Alliance Trust Savings

£50

£50

Initial/Admin: Nil. Annual: £10 per quarter.

Purchase: £12.50 (online). £40 (phone & post). Sale: £12.50 (online). £40 (phone & post). Transfer Out: N/a. Switch: N/a.

Baillie Gifford Savings Management

£25

£100

Initial/Admin: Nil. Annual: Nil.

Purchase: Nil. Sale: £22. Transfer Out: N/a. Switch: First free in any 12-month period, £22 thereafter.

Dunedin (through Alliance Trust Savings)

£50

£50

Initial/Admin: Nil. Annual: £10 per quarter.

Purchase: £12.50 (online). £40 (phone & post). Sale: £12.50 (online). £40 (phone & post). Transfer Out: N/a. Switch: N/a.

F&C Management

£25

£250

Initial/Admin: Nil. Annual: £25.

Purchase: £8 (online) £12 (post). Sale: £8 (online) £12 (post). Transfer Out: £12. Switch: Nil.

Intermediate Capital Group (through F&C Management)

£25

£250

Initial/Admin: Nil. Annual: £25.

Purchase: £8 (online) £12 (post). Sale: £8 (online) £12 (post). Transfer Out: £12. Switch: Nil.

J.P. Morgan Asset Management

£50

£500 (top up £100)

Initial/Admin: Nil. Annual: Nil.

Purchase: £10. Sale: £10 (N/A for regular savers). Transfer Out: Nil. Switch: Nil.

Martin Currie (through Alliance Trust Savings)

£50

£50

Initial/Admin: Nil. Annual: £10 per quarter.

Purchase: £12.50 (online). £40 (phone & post). Sale: £12.50 (online). £40 (phone & post). Transfer Out: N/a. Switch: N/a.

Scottish Investment Trust plc (Plan Manager: SIT Savings)

£25

£250

Initial/Admin: Nil. Annual: Nil.

Purchase: Nil. Sale: £12.50. Transfer Out: £30. Switch: N/a.

Witan Investment Services

£50

£250

Initial/Admin: Nil. Annual: £31.60.

Purchase: Nil. Sale: Nil. Transfer Out: Nil. Switch: N/a.

Source: AIC Stats

 

Manager-sponsored Junior ISAs

Scheme

Minimum monthly regular savings

Minimum Lump sum

Initial admin charges

Annual charges

Other charges

Other features

Alliance Trust Savings

£50

£50

Nil

£10 per quarter

Purchase: £12.50 (online). £40 (phone & post). Sale: £12.50 (online). £40 (phone & post). Transfer Out: £100. Switch: N/a.

Alliance Trust, all other investment companies, UK, AIM/ISDX shares, fixed interest, OEICs, unit trusts, ETF/ETCs, cash deposit and share exchange. Statements issued twice a year.

F&C Management

£30

£250

Nil

£25

Purchase: £8 (online) £12 (post). Sale: £8 (online) £12 (post). Transfer Out: £50. Switch: Nil.

Online service and online JISA application: www.fandc.com. Statements issued twice a year.

Fidelity

£50

£500

Nil

Nil

Purchase: Nil. Sale: Nil. Transfer Out: N/a. Switch: Nil.

Statements issued twice a year.

Frostrow (through Alliance Trust Savings)

£50

£50

Nil

£10 per quarter.

Purchase: £12.50 (online). £40 (phone & post). Sale: £12.50 (online). £40 (phone & post). Transfer Out: £100. Switch: N/a.

Alliance Trust, all other investment companies, UK, AIM/ISDX shares, fixed interest, OEICs, unit trusts, ETF/ETCs, cash deposit and share exchange. Statements issued twice a year.

J.P. Morgan Asset Management

£50

£100

Nil

Nil

Purchase: Nil. Sale: Nil. Transfer Out: N/a. Switch: N/a.

Investors cannot invest directly in Elect Managed Cash. Statements issued twice a year. Annual & Interim reports.

Martin Currie (through Alliance Trust Savings)

£50

£50

Nil

£10 per quarter

Purchase: £12.50. £40 (phone & post). Sale: £12.50. £40 (phone & post). Transfer Out: £100. Switch: N/a.

Alliance Trust, all other investment trust companies, UK, AIM/ISDX shares, fixed interest, OEICs, unit trusts, ETF/ETCs, cash deposit and share exchange. Statements issued twice a year.

NVM Private Equity (through Alliance Trust Savings)

£50

£50

Nil

£10 per quarter

Purchase: £12.50. £40 (phone & post). Sale: £12.50. £40 (phone & post). Transfer Out: £100. Switch: N/a.

Alliance Trust, all other investment trust companies, UK, AIM/ISDX shares, fixed interest, OEICs, unit trusts, ETF/ETCs, cash deposit and share exchange. Statements issued twice a year.

Witan Investment Services

£50

£250

Nil

£31.60

Purchase: Nil. Sale: Nil. Transfer Out: Nil. Switch: N/a.

Statements issued twice a year. Dividend reinvested. Annual & Interim reports. For more information, visit www.jumpsavings.com/sites/default/files/literature/Jump_T&Cs_2015_16.pdf

Source: AIC Stats

For more information on investment companies, visit www.theaic.co.uk

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