Which Isa is the lockdown winner: mine or my son’s?

Money Observer’s Prudent Parent compares the performance of his own stocks and shares Isa with his f…

12th June 2020 09:14

by Kyle Caldwell from interactive investor

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Money Observer’s Prudent Parent compares the performance of his own stocks and shares Isa with his firstborns Junior Isa. 

The coronavirus market sell-off has been painful for investors, but when comparing the performance of my stocks and shares Isa with my son’s Junior Isa, there’s been one clear winner – me.

Does that make me a bad father? Well, I suppose that’s for my son to judge in 16 years’ time, when the key is effectively cut and handed over to him to do what he pleases with the money. By then, though, I hope the investment trust I selected for his Junior Isa will have outshone the small number of funds and investment trusts I hold in my Isa.

Just over two years on from opening the Junior Isa, my son’s sole holding, Aberdeen Standard Asia Focus investment trust, shows a loss of 22%. While far from ideal, this is not a complete disaster; other Asia and emerging market-focused funds have fared worse, and given that the trust invests in small businesses, I knew it was not going to be a smooth ride.

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The premise behind purchasing the investment trust has not changed: over a long period (which has now fallen from 18 to 16 years), I believe Asian economies will continue to outpace those in the West, due to their younger populations and growing middle class. In an attempt to access the fastest-growing areas, Asia smaller companies seem a good fit.

One key reason I invested in the Aberdeen trust is because it’s managed by Hugh Young, a star fund manager who has a large amount of his own money invested in the trust. This struck a chord with me .

In terms of my own stocks and shares Isa, given that I have greater levels of diversification than my son, as I hold two investment trusts and two funds, my ‘outperformance’ (it has still fallen) from January to the end of April does not come as a surprise. Ultimately, I have my top Isa holding, Scottish Mortgage, to thank for counterbalancing the losses I suffered elsewhere.

A Junior Isa investment is for the very long term, and until I set pen to paper for this month’s column, I spent more time tracking down the password to sign into his account than I did worrying about how performance had been faring of late.

This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Related Categories

    Investment TrustsEmerging markets

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