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What funds could my millennial children invest in?

Anthony | Greater London| 06/09/2017 | 2

  • Funds

Anthony's question in full

What funds could my millennial children invest in?

Holly Mackay's Response

Your kids have a few decent options.

Nutmeg is a nice digital option which has good visualisation and is good to track on a mobile. You need a minimum of £500 to get going as a minimum plus regular savings of £100 a month. The charges are about 1.15% all-in but they will build and manage all of the investments. Even if your kids don’t put their money there, I’d suggest they check it out and do the ‘risk profiling’ journey.

If those minimums are too high, then you can get going on an investment platform. Charles Stanley Direct and Fidelity are the cheapest options for smaller amounts and you can start here with direct debits from £50 a month. If your kids do think money is boring, they won’t want to faff around initially with choosing and research all sorts of funds. So I suggest what we call a multi-asset fund. At this early stage, the most important things are just to get started and to keep costs low. So I would suggest the Vanguard LifeStrategy funds. The only choice they will need to make is how spicy they want this to be. They could have the most spicy 100% equity option or a much less spicy 40% equity version, for example. This will depend on their feelings about risk and the timeframe they are investing for. Given you mention ten years plus, and their ages, I would consider the more spicy versions.

If they buy a Vanguard LifeStrategy fund on Charles Stanley Direct, for example, this will cost about 0.49%. That is a very cheap way to invest! The visualisation will not be as good as with Nutmeg.

Finally, I think financial markets are weird at the moment. No-one knows what Brexit will mean. Government bond yields are crazy low – less than 0.7% for a 10 year bond. Interest rates are at historic lows. The FTSE will have some volatile times ahead. They will need to prepare for their £100 to turn into (possibly) £80 and (hopefully) into £120 and then back down again – it’s the nature of the beast! But over 10 years we work on the historic belief that the market will outperform cash.

Good luck

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

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Holly Mackay

Founder and MD of Boring Money, Holly Mackay has been working in the investments space since 1998. She read Modern Languages at Oxford, with a special focus on Mediaeval French which was deeply interesting and arguably utterly useless.

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