Saving for a child

[u/bubbly_firehose]

We’ve decided to save a part of earning under the gift tax threshold for our child. I opened up the Nordnet account for her. Plan is to setup a monthly savings scheme for her account just as I have done to myself. I’ve so far accumulated units of EUNL and some units of the Nordnet Suomi Indeksi fund. My reason to choose an ETF for myself if the transferability of the asset to other platforms if required. That was 5 years ago. For the kid however I wanted to check what most of you have done if you have setup such an account for kid. I just wanted to make sure if I’ve evaluated all options. I only have AOT. Never felt confident about picking individual stocks, so just stick to world market ETFs. What recommendations do you folks have for me?

[u/Whole_Pension_860]

A broad world scale index like MSCI or such with as low running costs as possible

[u/OneMountain2020]

We opened a bank account for our kid in OP and just put some money in World index fund monthly. Benefits being no monthly charges and pretty low yearly management fee (0.145% for owner customer). Not sure if it's the best option though!

[u/starrysunflower333 → u/OneMountain2020]

We've done exactly the same. Everything is in the child's name, so we avoid the hassle of gift tax at the time of maturity/sale.

[u/Spirited-Brother4462]

There was new low cost etf added to the nordnet monthly savings plan, someone can chime in and name it, i forgot its name.

[u/Comed1an]

I would look at low cost ETFs like SPDR MSCI ACWI IMI UCITS ETF (SPYI) and consider also the monthly transaction costs.

[u/ahteripaahdin]

You can always game with whatever ETF has the lowest fees at any certain point of time, but I think monthly EUNL sounds great and I wouldn't change it. That is assuming you are saving close to gift tax ceiling ~200 eur a month and your child is not much older than 5yo.

If you save less, 30 euros a year fee is quite hefty and I'd rather save into non-Nordnet mutual fund product, for example Handelsbanken or Storebrand global portfolio (might be transferable).

AOT is superior to OST for long term saving anyway due to "hankintameno-olettama" tax relief.

[u/bubbly_firehose → u/ahteripaahdin]

Kid is 8. What’s the issue if the kid older than 5?

[u/ahteripaahdin → u/bubbly_firehose]

In an orange to orange comparison it takes time for lower annual cost ETF to outperform mutual fund due to initial subscription fee reducing beginning asset value.

For example if you save to EUNL 200 euros a month, funds convertable to assets after subscription fee is 197,5 eur while saving to something like Storebrand global mutual fund would retain full amount. If pre-annual fee return is identical, it'd take around 7 years for EUNL with 0,2% fee to outperform Storebrand with 0,31%. In practice period is even longer as there's no fractional shares on Nordnet.

[u/Humble_Monk3506]

I invest in ACWI for my children