Fund ideas to get your kids excited about investing
Junior ISAs are the modern-day piggy bank for parents who want to help their children get a good start in life.
As much as £4,260 per child can currently be placed into these tax-efficient accounts (rising to £4,368 next tax year). The money can then be saved in cash or invested in stocks and shares. Once a child reaches the age of 18 the account immediately becomes a full adult ISA.
But how can we actively engage with our children, so they understand the value of investing and take an interest in the money we are tucking away for their future?
A bit like Toy Story, Pixar’s first full feature film, one way of gaining a child’s attention is to bring the investment to life: relating it to something they themselves do or enjoy.
To help a parent or grandparent do this we’ve identified four funds with products your child can identify with:
For those who like cartoons and dreaming
Walt Disney: held by TB Evenlode Global Income
Founded almost a century ago this entertainment juggernaut continues to grow. Every child who has ever watched TV is likely to have seen a Disney production at some point in their lives. From Mickey Mouse to the Lion King and Frozen for a younger audience, through to the Marvel series, which has seen 21 films come to the big screen over the past decade, with at least 10 more in various stages of production, the list is endless. The company is now looking to compete with Netflix, with its sports streaming service and the launch of Disney+ at the end of this year.
This fund invests in quality, cash-generative businesses from all over the world. The managers look for quality companies with three characteristics: asset-light business models; high barriers to entry which can’t be disrupted easily; and whose customers’ decision to buy their product or service should not be determined completely by price.
For the film lovers
Cineworld Group: held by Montanaro UK Income
Cineworld Group is the only UK cinema business listed on the London Stock Exchange. Following its acquisition of US company Regal Cinemas it is also now the second largest cinema chain in the world, with almost 10,000 screens in 10 countries – and just one of the places we can take our children to watch the above-mentioned Disney films.
Montanaro UK Income invests in entirely medium and small-sized UK companies, many of which are niche businesses in growing markets. It is run by an industry veteran, Charles Montanaro, who has grown his company from scratch to become one of the most respected small-cap asset managers in Europe. Charles is a real character and his search for investment ideas goes well beyond company research – he has even ‘holidayed’ looking for undiscovered tribes in the Amazon!
For those who like chocolate
Nestle: held by Janus Henderson European Select Opportunities
Nestle is the largest food company in the world and sells major brands including KitKat and Smarties – two naughty but nice treats enjoyed by children (and adults) of all ages. It is currently the largest holding in Janus Henderson European Select Opportunities fund.
The team’s investment philosophy is based on the belief that macroeconomic and sector trends travel globally. Therefore, early insights into the behaviour of European companies can be gained from understanding global market and industry dynamics. The managers seek to capture investment opportunities through correctly anticipating change and inflection points in companies and industries either for the better or for the worse.
For those who like home entertainment
Sony: held by Axa Framlington Japan
Sony is world renowned as a technological behemoth when it comes to electronics, gaming, film and entertainment. Kids will know the company well for Playstation game consoles and televisions, among the other things they produce.
The manager of Axa Framlington Japan fund looks to identify thematic trends which generate ideas and informs her stock picking – recent themes include; the globalisation of Japanese food, ageing populations, automation and the increased use of electronics in cars. After two lost decades Corporate Japan has completely re-invented itself and the manager of this fund says : “I’m really enjoying finding, contacting and connecting with these new 21st century businesses.”
Darius McDermott is managing director of Chelsea Financial Services, a fund platform