Junior ISAs — Keeping it simple
It’s now over 5 years ago since I wrote an article on Medium with a guide to setting up Junior ISAs — something we did back then for my grandchildren with A J Bell YouInvest (no connection other than as a happy customer). Scores on the doors as of 31st December 2020:
This after an end of year adjustment where shares in Alphabet (Google Class A and Class C shares) have made way for deeper investments in Amazon and Apple, with cash residue deployed in more Index Tracker Units.
My gut suggests that Google are largely saturating their main historical growth engine (Advertising) and not making sufficient progress in monetising some of their most promising future revenue streams (from Deepmind and Google Cloud Platform). Having dropped App/Maker, they are yet to really wind the engines up on their AppSheet acquisition; all the right ingredients for a big push into Enterprise accounts, but zero effort apparent to drive it. Hence the sell.
Amazon continue to impress across the board; their relentless execution of their 14 management principles continues with tentacles into several potential high growth markets.
Apple now ship more watches per annum than the totality of the Swiss Watch Industry. While that’s been ramping, their Semiconductor folks have been knocking it out of the park with the relentless performance improvements in their ARM based M1 processors; to emulate an Intel processor faster that a native Intel processor is a stunning achievement. As is having that in a laptop that keeps running battery only for 20 hours straight.
Both Amazon and Apple have had a stellar year despite the Covid pandemic.
It’s personally been a tough year financially and we’ve not contributed regularly to the kids ISAs for a couple of years now. However, the principles of long term buy and hold and investments in a small number of high growth, high (future) market share companies have served us well. Even the Vantage 100% Equity Accumulating Index Trackers have gone up 50% over the last 7 years, where high street equivalents dawdle behind at much less than 2%/annum returns here.
If you want to replicate what we’ve done, the original instructions remain valid to this very day. The eldest (inherited) granddaughter is over 18 now and assumed ownership of her Junior ISA on her 18th Birthday; we can hence no longer see her returns. Her slightly younger brother is still invested and is nip and tuck at the same level as his younger sister with less than 2 years to go for him. All appear fairly content with progress so far.
Best Wishes for a Successful 2021.
