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Taking charge of my investments at 21

We give some tips to a student who is taking over two portfolios that her father has been managing on her behalf since she was born

Emma has just turned 21 and has a self-invested personal pension (Sipp) and an individual savings account (Isa). She recently raised an eyebrow when she asked the University Library to stock Investors Chronicle.

"I have been investing for just under a year, but my dad has been investing for me since I was born," she says. "I am excited about taking over total ownership of my investment portfolio.

"The Sipp and Isa that my dad has been managing for me include inheritances and his own regular contributions. My Dad targeted both portfolios towards growth, predominately in high-tech as he works in that sector. He set up my Isa to be a deposit on my first house in five or seven years' time, whereas my Sipp was set up so I can get a head start in pension provision. However, I wish to change the portfolios as I have different objectives for them.

"I am in my second year of University studies and plan to go and live abroad in the next two years as I am mad keen on snowboarding and have qualified as an instructor.

"I am living on a student grant (debt) and need income. I therefore want to change my Isa fund into an income-generating machine, whereas for my Sipp I am prepared for the long game and more risk.

"My dad has promised to put a minimum of £5,000 a year into my portfolio for the next five years. At present he puts the maximum amount, £2,880, into the pension and the rest into my Isa.

"I want my dad's promised £5,000 a year to be 100 per cent allocated to my Isa only. If I buy in the UK I am interested in the Help-to-Buy Isa as I would be a first-time buyer. However, I am a strong believer in investing rather than saving, so don't think this is for me."

Help-to-Buy Isas are based on a cash savings account and the scheme does not yet apply to stocks-and-shares Isas.

Emma's portfolio is held with Hargreaves Lansdown, which she thinks may be too expensive.

"I want to change both portfolios so as to have more collective investments as I cannot be monitoring my investments more than once a month. Also in summer holidays I travel and cannot really monitor them.

"My dad is a momentum investor, which I think is missing the big high-risk trades that I am happy to utilise in my Sipp. Also, his stock picks for the Isa have been too high risk which is reflected in the very poor return."

Emma recently sold an investment that her dad made in GW Pharmaceuticals (GWP). "It was his idea of a joke as he thought students would be interested in cannabis-based bio."

Instead she has invested in JD Sports (JD.) and Amazon (US:AMZN). "I am a customer of both and they have performed very well."

Reader Portfolio
Emma 21



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