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    • Home • Advice • Common questions

    Should I get a Junior ISA with a robo adviser, or invest via an investment trust?

    20 July 2021

    Question by Rick

    Hi. I am looking for a Junior ISA for my son and can't decide between a robo investor like Wealthify, or investing via Interactive Investor with an investment trust for my son's Junior ISA. I want to invest ethically and am happy to research investment trusts myself. The fees seem similar and both have fund managers. What would you do?

    Answered by Boring Money

    Making fund selections
    If you’re happy making the selection yourself, and it sounds like you are, then I would suggest fund choice will be the important factor in deciding which way to go.

    Costs
    You mention that costs are similar, so it comes down to whether you feel the ‘robo’ option adds any value.

    Investment Trusts
    Investment trusts can work well for long-term investment, but there are two added complications to consider: leverage and the fact that they can run at a ‘premium’ or ‘discount’ to ‘net asset value’.

    Overall
    I would suggest that unless your son is within five years of turning 18 – and therefore having access to the money – then a global portfolio makes sense.

    Just bear in mind that most research suggests the best ‘anxiety-adjusted’ return, is found in a diversified basket of shares and fixed interest, and only some funds will offer that.

    Investing ethically
    As for the ethical side of things, your own research should reveal which funds cover the areas you feel are important.

    There is definitely a wide range of ‘shades of green’ available.

    Finally, it’s worth keeping in mind that the Junior ISA is a ‘locked box’, except for in extreme circumstances, until the child turns 18. Not even you can access it for your son’s benefit e.g. his education.

    Answered by

    Boring Money

    Here to help you understand your options and make smart money choices.

    Important stuffHolly and the team have worked in the finance industry for many years but we are not regulated to give you personal financial advice. For every story on this website about a good investment, or something which went up by 10% or made someone £200, we could also share a story about a bad investment, something which fell in value or lost someone £200. We aim to provide general information and pointers – and btw we are totally agnostic about which providers you might pick – but if you have complex affairs, want personalised advice or need specific recommendations, please look at advice pages and see if regulated digital or traditional financial advice would be the best solution for your needs. Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
    Risk warningAs is always the case with investing, your capital is at risk. The value of your portfolio can go down as well as up and you may get back less than you invest. Tax treatment depends on your individual circumstances and may change in the future.
    Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
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