LONDON: Junior ISAs one year on – analysis from J.P. Morgan Asset Management

Oct 22, 2012

  • Average J.P. Morgan Junior ISA pot stands at £2,420
  • Emerging Markets prove popular in J.P. Morgan Junior ISAs for long-term gains
  • Long-term savings are crucial - one in three parents expects to support their children financially for the rest of their lives

London, Monday, October 22, 2012: As the first anniversary of Junior ISAs approaches, J.P. Morgan Asset Management reveals where parents are investing for the long-term financial future of their children.

Launched on 1 November 2011, Junior ISAs enable parents and families to save up to £3,600 a year tax-free (in cash and/or equities). HMRC data supplied by the Tax Incentivised Savings Association (TISA) revealed the initial uptake over the first five months1: by 5 April 2012, 71,000 Junior ISA accounts were opened with an average £1,623 invested. J.P. Morgan Asset Management (JPMAM) launched its Junior ISA on 17 February 2012, and its own data reveals that by 31 July 2012, the average account balance in a Junior ISA was £2,420.

When looking at the top-selling investments within Junior ISAs, J.P. Morgan Asset Management found parents are favouring Emerging Markets for their children's savings either collectively or via individual countries such as China. Interestingly, investment trusts have proved popular: seven of the most popular investments held in Junior ISAs are investment trusts, including JPMorgan Claverhouse and JPMorgan Global Emerging Markets Investment Trust.

Top 10 fund choices for the J.P. Morgan Junior ISA by total amount invested:

  1. JPMorgan Global Emerging Markets Income Trust
  2. JPMorgan Emerging Markets Investment Trust
  3. JPM Emerging Markets
  4. JPMorgan Chinese Investment Trust
  5. JPMorgan Claverhouse Investment Trust
  6. JPMorgan US Smaller Companies Investment Trust
  7. JF Asia Pacific ex Japan Equity
  8. Royal Dutch Shell plc
  9. JPMorgan Elect – Managed Growth
  10. BlackRock Emerging Markets

Top 10 fund choices for the J.P. Morgan Junior ISA by number of investors:

  1. JPM Emerging Markets
  2. JPMorgan Claverhouse Investment Trust
  3. JPMorgan Global Emerging Markets Income Trust
  4. JPMorgan Emerging Markets Investment Trust
  5. JPMorgan Elect – Managed Growth
  6. JPMorgan Chinese Investment Trust
  7. JPM Global Consumer Trends
  8. JPMorgan Indian Investment Trust
  9. JPMorgan US Smaller Companies Investment Trust
  10. JPM US

Source: J.P. Morgan Asset Management, as at 31 July 2012

Keith Evins, Head of UK Funds Marketing at J.P. Morgan Asset Management, commented: "As parents it is important we do as much as possible to encourage and support the dreams of our children. Starting from £50 per month2, parents and grandparents can save tax-efficiently into a Junior ISA, helping give their children and grandchildren a financial ‘step up' as they become adults. We have seen that parents are looking across the globe for returns for their investments, in particular, looking at emerging markets to deliver long-term returns for their children."

According to consumer research3 carried out by J.P. Morgan Asset Management, parents in the UK are ‘in it for the long haul' when it comes to supporting their children financially: over a third of parents with teenagers (35%) feel they will be supporting their children financially in one way or another for the rest of their lives. However, only just over half of parents with teenage children (56%) are actually putting any money aside at the moment.

Evins continued: "The cost of living continues to rise, and with university tuition fees, weddings and first homes costing enough to make your eyes water, it is no longer realistic for parents to expect to be able to finance everything for their children as they approach adulthood. If £50 a month was saved into a J.P. Morgan Junior ISA from birth to 18, the resulting pot could total £17,3334, a great help towards university, a first house or business. By investing the maximum £3,600 a year, or £300 a month, the pot could grow to an impressive £103,9994 assuming growth of 5% a year, although, of course, the value of investments can fall as well as rise."

The Junior ISA is available for UK resident children under the age of 18 who do not have a Child Trust Fund – broadly, this means those born before 1 September 2002 or after 2 January 2011. For children who do not qualify for a Junior ISA, J.P. Morgan's Investment Account can be designated for the benefit of a child, or held within a bare trust. Parents of children who are eligible for a Junior ISA may also want to consider a wrapper such as the Investment Account, which while it does not have the tax benefits of a Junior ISA, has no limit on subscriptions, and allows the parent to retain more control over the investment than a Junior ISA, which is legally the property of the child.

J.P. Morgan Junior ISA

The Junior ISA is available on J.P. Morgan Asset Management's online platform, J.P. Morgan WealthManager+, along with ISAs, SIPPs and investment accounts, and can invest in funds offered by both J.P. Morgan Asset Management and other fund providers, as well as individual company shares.

J.P. Morgan WealthManager+

The J.P. Morgan WealthManager+ online platform allows customers to access a number of financial planning tools, such as the financial health check and a tool to evaluate attitudes to investment risk to help with investment decisions. It is ideal for investors who want to take control of their financial future, offering a wide selection of investments including OEICs, SICAVs and investment trusts from J.P. Morgan as well as funds from other leading fund managers, equities and ETFs. Investments can be held in an ISA, SIPP or directly in an Investment Account.

- Ends -

Notes to Editors


2 £50 a month in a J.P. Morgan Junior ISA (other providers may have different minimum investments)

3 Opinium Research carried out an online survey of 506 UK adults aged 18+ with children between the ages of 13-19 from 2nd to 6th August 2012. Opinium Research also carried out an online survey of 505 UK teenagers aged 14-16 from 2nd to 6th August 2012.

4 Assuming growth of 5% a year, gross of underlying fund charges. There is no charge for the J.P. Morgan Junior ISA product. The value of investments can go down as well as up and you may get back less than you invested.

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About J.P. Morgan Asset Management

J.P. Morgan Asset Management is part of JPMorgan Chase & Co. and is a global asset management leader providing world-class investment solutions to clients. With US$1.4 trillion in assets under management (the Asset Management client funds of JP Morgan Chase & Co. as at 30 September 2012) and offices in 41 locations around the world, J.P. Morgan Asset Management offers global coverage with a strong local market presence, and leadership positions in most asset classes.

J.P. Morgan Asset Management is a trading name of J.P. Morgan Asset Management Marketing Limited which has issued this material in the United Kingdom and which is authorised and regulated by the Financial Services Authority. Registered in England No. 288553. Registered office: 25 Bank Street, Canary Wharf, London E14 5JP.

Any past performance referred to in this material is not a guide to future performance and the value of investments, and any income from them, can fall as well as rise. Any tax concessions referred to are not guaranteed and their value will depend on the individual circumstances of investors. Stock market linked investments carry a number of inherent risks. These risks will increase where fluctuations in exchange rates impact on the value of any underlying investments or where the investment is exposed to smaller companies or emerging markets. Investments in fixed income securities that are not rated as investment grade represent a greater risk to an investor's capital.


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